Mediaset Groupplit/Relazione Corp… ·

Mediaset Group

Report on corporate governance and ownership structure

The report, written pursuant to Article 123-bis of the T.U.F. can be accessed at the registered office, is published on the Company’s website, and is available on the authorised storage mechanism eMarket Storage (www.emarketstorage.com) in accordance with the methods and terms required by regulations in force. Issuer: Mediaset S.p.A.. Website: www.mediaset.it Financial year to which the report refers: ending on 31 December 2016 Date of approval of the report: 19 April 2017

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Contents

Glossary .............................................................................................................................................................................................................. 2

1. PROFILE OF THE ISSUER ................................................................................................................................................................................... 3

2. INFORMATION ON OWNERSHIP STRUCTURES AT 19 APRIL 2017 .......................................................................................................................... 5

Mediaset Shareholders .............................................................................................................................................................................. 5

Structure of share capital ........................................................................................................................................................................... 5

American Depositary Receipts programme ................................................................................................................................................... 5

Restrictions on the transfer of securities ...................................................................................................................................................... 5

Relevant equity investments in share capital ................................................................................................................................................ 6

Securities with special rights ...................................................................................................................................................................... 6

Employee shareholdings: mechanism for exercising voting rights .................................................................................................................... 6

Restrictions on the right to vote .................................................................................................................................................................. 6

Agreements between shareholders ............................................................................................................................................................. 6

Change of control clauses and provisions of Company Bylaws regarding Public Purchase Offers ......................................................................... 6

Legislation and regulations applicable to the appointment and replacement of Directors and changes to the Company Bylaws ............................... 7

Powers to increase share capital and authorisation to purchase treasury shares ............................................................................................... 7

Management and coordination activities (pursuant to Article 2497 et seq. of the Italian Civil Code ..................................................................... 7

3. COMPLIANCE ................................................................................................................................................................................................... 8

4. BOARD OF DIRECTORS ...................................................................................................................................................................................... 8

4.1 APPOINTMENT AND REPLACEMENT.................................................................................................................................................................. 8

4.2 COMPOSITION ................................................................................................................................................................................................ 9

4.3. THE ROLE OF THE BOARD OF DIRECTORS ...................................................................................................................................................... 12

4.4 DELEGATED BODIES ...................................................................................................................................................................................... 15

4.5. OTHER EXECUTIVE DIRECTORS ..................................................................................................................................................................... 17

4.6. INDEPENDENT DIRECTORS ........................................................................................................................................................................... 17

4.7 LEAD INDEPENDENT DIRECTOR ...................................................................................................................................................................... 18

5. THE PROCESSING OF COMPANY INFORMATION ................................................................................................................................................. 19

6. COMMITTEES WITHIN THE BOARD OF DIRECTORS .............................................................................................................................................. 20

7. THE GOVERNANCE AND APPOINTMENTS COMMITTEE ........................................................................................................................................ 21

8. THE COMPENSATION COMMITTEE .................................................................................................................................................................... 23

9. COMPENSATION OF DIRECTORS ....................................................................................................................................................................... 25

10. RISK AND CONTROL COMMITTEE .................................................................................................................................................................... 25

11. THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM ............................................................................................................................. 28

11.1. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM DIRECTOR ...................................................................................................... 32

11.2. INTERNAL AUDIT FUNCTION MANAGER ............................................................................................................................................. 33

11.3. COMPLIANCE PROGRAMME PURSUANT TO LEGISLATIVE DECREE 231/2001 ........................................................................................ 34

11.4. THE INDEPENDENT AUDITORS ......................................................................................................................................................... 36

11.5. THE FINANCIAL REPORTING OFFICER ............................................................................................................................................... 36

11.6. COORDINATION BETWEEN PARTIES INVOLVED IN THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM ........................................ 37

12. INTERESTS OF DIRECTORS AND RELATED-PARTY TRANSACTIONS .................................................................................................................... 37

13. APPOINTMENT OF STATUTORY AUDITORS ...................................................................................................................................................... 38

14. STATUTORY AUDITORS ................................................................................................................................................................................. 39

15. RELATIONS WITH SHAREHOLDERS ................................................................................................................................................................. 40

16. SHAREHOLDERS’ MEETINGS .......................................................................................................................................................................... 41

17. CHANGES AFTER THE END OF THE REPORTING PERIOD .................................................................................................................................... 42

ATTACHMENT A ..................................................................................................................................................................................... 43

ATTACHMENT B ...................................................................................................................................................................................... 46

ATTACHMENT C ...................................................................................................................................................................................... 51

ATTACHMENT D...................................................................................................................................................................................... 52

ATTACHMENT E ...................................................................................................................................................................................... 54

ATTACHMENT F ...................................................................................................................................................................................... 55

Mediaset Group - Report on corporate governance and ownership structure

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GLOSSARY

Internal Control and Risk Management System Director: the Director appointed to oversee the

functioning of the internal control and risk management system of Mediaset S.p.A.

Shareholders’ Meeting: the General Meeting of the Shareholders of Mediaset S.p.A.

Code/Corporate Governance Code: the Corporate Governance Code for Listed Companies approved in

July 2015 by the Corporate Governance Committee and promoted by Borsa Italiana S.p.A., ABI, Ania,

Assogestioni, Assonime, and Confindustria, which is available on the website

www.borsaitaliana.it/comitato-corporate-governance/codice/2015clean.pdf.

Italian Civil Code: the Italian Legal Code containing Company Law.

Board of Statutory Auditors/Board: the Board of Statutory Auditors of Mediaset S.p.A.

Executive Committee/Committee: the Executive Committee of Mediaset S.p.A.

Committee of Independent Directors: the Committee of Independent Directors for Related-Party

Transactions of Mediaset S.p.A.

Board of Directors/Board: the Board of Directors of Mediaset S.p.A.

Consob: the Italian Securities and Exchange Commission.

Financial Reporting Officer: the Financial Reporting Officer with responsibility for producing the

financial reports of Mediaset S.p.A.

Issuer/Company/Mediaset: Mediaset S.p.A.

2016/year: the 2016 financial year.

Group: the Mediaset Group.

Market Abuse Regulation/MAR: Regulation (EU) No. 596/2014 of the European Parliament and Council

and relative Implementing Regulations.

Compliance Programme: the Compliance Programme of Mediaset S.p.A., pursuant to Legislative Decree

231/2001, available on the website www.mediaset.it/corporate/impresa/modello231_01_it.shtml.

Supervisory and Control Body: the Supervisory and Control Body appointed by the Board of Directors

of Mediaset S.p.A., pursuant to Article 6 of Legislative Decree 231/01.

Related-Party Procedure: the procedure for transactions with related parties of Mediaset S.p.A.,

available on the site www.mediaset.it/investor/governance/particorrelate_it.shtml.

Inside Information Procedure: the institutional procedure for the management and disclosure of inside

information concerning Mediaset S.p.A., governing, in accordance with the Market Abuse Regulation,

the internal handling and disclosure of inside information.

Internal Dealing Procedure: the institutional internal dealing procedure of Mediaset S.p.A., governing,

in accordance with the Market Abuse Regulation, trading by relevant persons inside the company and

persons closely related to them, available on the site

www.mediaset.it/investor/governance/internaldealing_it.shtml.

General Meeting Regulations: the regulation approved by shareholders at the Mediaset General Meeting

of 9 April 2001, available on the site

www.mediaset.it/gruppomediaset/bin/47.$plit/Regolamento_Assembleare.pdf.

Consob Issuer Regulations: the Regulations issued by CONSOB with resolution no. 11971 of 1999

(subsequently amended) regarding Issuers.

http://www.borsaitaliana.it/

http://www.mediaset.it/corporate/impresa/modello231_01_it.shtml

http://www.mediaset.it/investor/governance/internaldealing_it.shtml


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Consob Market Regulations: the Regulations issued by CONSOB with resolution no. 16191 of 2007

(subsequently amended) regarding markets.

Consob Regulations on Related-Party Transactions: the regulation issued by Consob with resolution

No.17221 of 12 March 2010 concerning transactions with related parties.

Report: the report on Corporate Governance and Ownership Structures that companies are required to

produce pursuant to Article 123-bis of the Consolidated Finance Law.

System: the internal control and risk management system.

Company Bylaws: the Company Bylaws of Mediaset S.p.A., which are available on the website

www.mediaset.it/investor/governance/statuto_it.shtml.

TUF: Legislative Decree no. 58 of 24 February 1998 (Testo Unico della Finanza - Consolidated Finance

Act).

The report can be accessed at the registered office and is published on the Company’s website and

available on the authorised storage mechanism eMarket Storage (www.emarketstorage.com) in

accordance with the methods and terms required by the regulations in force. The information contained

in this report refer to the year 2016 , with some specific matters updated as at 19 April 2017, the date

of the Board of Directors’ meeting that approved the report, together with the financial statements.

1. PROFILE OF THE ISSUER1

Mediaset is a multinational media group, which has been listed on the Italian Stock Exchange since

1996, mainly operating in the television industry in Italy and Spain.

In Italy, Mediaset has two main areas of business:

§Integrated television operations consisting of commercial television broadcasting over three

of Italy’s biggest general interest networks and an extensive portfolio of thematic free-to-air

and pay TV channels (linear, non-linear and OTTV), with a broad range of exclusive content,

centred on soccer, cinema, TV series, documentaries and children’s television channels.

§Network infrastructure services and management through the 40.1% holding in EI Towers, the

leading independent tower operator in Italy, engaged in network infrastructure management

and the provision of electronic communications services for television and radio broadcasting

and mobile transmissions.

In Spain, Mediaset is the majority shareholder of Mediaset España Comunicatión S.A., the leading

Spanish commercial television broadcaster with two main general interest channels (Telecinco and

Cuatro) and a bouquet of six free-to-air thematic channels.

In 2016, the integrated television model was further enhanced through significant investments in

exclusive content and new broadcasting technologies, and the launch of a new avenue of development

targeted at radio broadcasters.

The integrated television model consists of the following main activities:

- content production and acquisition from third parties;

- linear and non linear, free-to-air and pay per view content distribution;

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Refer also to the financial statements and to the Mediaset website for the Issuer's profile.

http://www.emarketstorage.com/


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- other ancillary activities mainly relating to movie production and distribution, teleshopping and

broadcasting, licensing and merchandising, foreign advertising concessions handled by the subsidiary

Publieurope, and the radio broadcasting operations acquired at the end of the third quarter of the year.

Mediaset has adopted a traditional administration and control system consisting of the following

company bodies: the Shareholders’ Meeting, the Board of Directors, the Executive Committee and the

Board of Statutory Auditors. In accordance with relative laws in force, accounts are audited by

independent auditors listed in the register held by CONSOB.

The Board of Directors has established, from among its members, three committees with advisory

functions: the Compensation Committee, the Internal Risk and Control Committee and the Governance

and Appointments Committee.

The powers and functioning of company bodies and committees are governed by law, by the Company

Bylaws, by the Corporate Governance Code and by resolutions passed by competent company bodies.

The Board has also designated a Financial Reporting Officer2 and Internal Control and Risk Management

System Director and has appointed a Supervisory and Control Body.3

Shareholders' meeting

Board of Directors

Board of Statutory

Auditors

Risk and Control

Committee

Governance and Appointments

Committee

Compensation

Committee

Independent Directors Committee for

Transactions with Related Parties

Independent Auditors Reconta Ernst & Young

Mauro Lonardo (C) Francesca Meneghel Ezio Maria Simonelli

Fedele Confalonieri (C) Pier Silvio Berlusconi (DC/CEO)

Giuliano Adreani Marina Berlusconi

Franco Bruni Pasquale Cannatelli

Mauro Crippa Bruno Ermolli

Marco Giordani Fernando Napolitano

Gina Nieri Michele Perini

Alessandra Piccinino Niccolò Querci

Stefano Sala Carlo Secchi

Wanda Ternau

Secchi Carlo

Carlo Secchi (C) Franco Bruni

Fernando Napolitano

Carlo Secchi (C) Michele Perini Wanda Ternau

Michele Perini (C) Bruno Ermolli

Fernando Napolitano

Michele Perini (C) Alessandra Piccinino

Carlo Secchi

Executive Committee

Fedele Confalonieri (C) Pier Silvio Berlusconi

Giuliano Adreani Marco Giordani

Gina Nieri

Internal Control and Risk

Management System Director

Supervisory and Control

Body

Fedele Confalonieri

Sergio Beretta (P) Davide Attilio Rossetti

Aldo Tani

Financial Reporting

Officer

Luca Marconcini

The information in this report, unless otherwise indicated, refers to the date of approval of the report by

the Board of Directors (19 April 2017).

2

In accordance with Article 154-bis of the T.U.F. and article 29 of the Company Bylaws. 3

Pursuant to Legislative Decree 231/2001


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2. INFORMATION ON OWNERSHIP STRUCTURES AT 19 APRIL 2017

Mediaset Shareholders

38,3%

28,8 %

3,8%

Fininvest

Vivendi

Treasury shares

Mercato

percentage calculated on share capital

29,1 %

Structure of share capital

The share capital of Mediaset S.p.A. is € 614,238,333.28 fully paid up and subscribed; it consists of

common shares, as shown below:

Number of shares

Percentage of

Share Capital

Listed / non-listed Rights and obligations

Ordinary shares 1,181,227,564* 100% Borsa Italiana Pursuant to Law and

(nominal amount EUR 0.52 each) - Blue Chip segment - and the Bylaws

TABLE 1: INFORMATION ON OWNERSHIP STRUCTURES

* As of 19.04.2017 the company held 44,825,500 treasury shares, or 3.795% of the share capital, whose voting rights are suspended in accordance with article 2357 ter of the Italian Civil Code.

STRUCTURE OF SHARE CAPITAL

No other financial instruments have been issued with the right to subscribe to new share issues.

No share-based incentive plans have been established that would increase share capital, even without

any consideration.4

American Depositary Receipts programme

In 2015 Mediaset renewed the ADR (American Depositary Receipts) programme, introduced in 2005 in

the US market. The ADR are certificates representing Mediaset shares and are traded on the US market

in accordance with the Level 1 programme. JP Morgan Chase Bank N.A. is the bank depositary of the

Mediaset ADR. Three common shares traded in the Milan stock exchange correspond to each Mediaset

ADR5.

Restrictions on the transfer of securities

Pursuant to the Company Bylaws, shares are registered, indivisible and freely transferable. Provisions

regarding representation, legitimisation and the circulation of equity investments for securities that are

traded on regulated markets are applied.

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The Shareholders' Meeting of 29 April 2015 approved a medium-long-term loyalty and incentive plan for the three-year period 2015-2017 pursuant

to art. 114-bis of the TUF based on the Company's own shares. Additional information on the plan is available on the Company’s website. 5

Further information is available on the Company's website.

http://della/


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Relevant equity investments in share capital

As at 19 April 2017, as of notices received pursuant to Article 120 of the T.U.F., and other available

information, material equity investments in the share capital of Mediaset S.p.A. were as follows:

RELEVANT EQUITY INVESTMENTS IN SHARE CAPITAL

Declarer Direct Shareholder % ownership %

of ordinary capital

oordinary v

oBerlusconi Silvio Fininvest S.p.A. 38,266

VIVENDI S.A. VIVENDI S.A. 28,804

Mediaset S.p.A. Mediaset S.p.A. 3,795 (*)3

.

(*) without voting rights.

Securities with special rights

No securities with any special control rights have been issued. The Bylaws do not envisage multiple vote

shares.

Employee shareholdings: mechanism for exercising voting rights

There is no employee shareholding system with a mechanism for exercising voting rights, other than

that established for all other shareholders of the Company.

Restrictions on the right to vote

All ordinary shares that are currently in circulation have voting rights, with the exception of treasury

shares held by the Company for which voting rights are suspended pursuant to Article 2357-ter of the

Italian Civil Code.

Agreements between shareholders

There are no shareholders’ agreements concerning the Company, pursuant to Article 122 of the TUF.

Change of control clauses and provisions of Company Bylaws regarding Public Purchase Offers

The Company, as part of its normal business operations, has loan agreements in place, including the

agreements relative to the corporate bond issue of 21 January 20106 and 17 October 2013, which

envisages, as is common practice on financial markets, specific effects if a “change of control” takes

place (such as, for example, settlement or modification in the case of a change of control of the

Company). However, none of these contracts may be considered significant by itself7.

As regards the subsidiary EI Towers S.p.A., please refer to its own Report on Corporate Governance and

Ownership Structure.

Agreements between the Company and directors

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Expired in February 2017

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The Bylaws of the Company do not contemplate departures from Public Purchase Offer regulations concerning the passivity rule pursuant to Article

104, paragraph 1 and 1-bis of the T.U.F., or the application of neutralisation rules pursuant to Article 104-bis, paragraphs 2 and 3 of the T.U.F..


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No agreements exist between the Company and directors, as of Article 123-bis, paragraph one, letter i)

of the TUF.

Legislation and regulations applicable to the appointment and replacement of Directors and changes to the Company Bylaws

As regards regulations applicable to the appointment and replacement of directors, reference is made to

paragraph 4) relative to the Board of Directors. Pursuant to the Company Bylaws and without prejudice

to the areas of responsibility of the Extraordinary Shareholders' Meeting, which maintains powers to

pass resolutions thereon, the Board of Directors has the power to pass resolutions regarding mergers

and demergers in cases established by Articles 2505, 2505-bis and 2506-ter of the Italian Civil Code,

the establishment or closure of secondary sites, the appointment of directors to represent the

Company, the reduction of share capital in the case of withdrawal of a shareholder and amendments to

the Company Bylaws to legal provisions.

Powers to increase share capital and authorisation to purchase treasury shares

No powers to increase share capital pursuant to Article 2443 of the Italian Civil Code, or to issue any

financial instruments that would constitute equity investments, have been granted.

The Shareholders’ Meeting of 27 April 2016 adopted a resolution authorising the Board of Directors to

purchase, also through trading in options or financial instruments, including derivatives on Mediaset

stock, up to a maximum number of 118,122,756 common shares with a par value of EUR 0.52 each -

amounting to 10% of the share capital - in one or more lots, until the approval of the Financial

Statements at 31 December 2016 or for a period of no longer than 18 months from the date of the

relative shareholders’ resolution. The above amount is covered by available reserves as shown in the

last approved Financial Statements8.

From the date of the General Meeting to the present, no treasury shares have been purchased. As a

result, at 19 March 2017, the Company held 44,825,500 treasury shares, amounting to 3.795% of the

share capital .

Management and coordination activities (pursuant to Article 2497 et seq. of the Italian Civil Code

Mediaset S.p.A. is subject to the de facto control of Fininvest S.p.A., as the latter owns 38.266% of the

share capital. On 4 May 2004 Fininvest S.p.A. informed Mediaset that it does not carry out any

management and coordination activities, pursuant to Article 2497 et seq. of the Italian Civil Code,

regarding Mediaset. The Company acknowledged the notice of Fininvest S.p.A. in the meeting of the

Board of Directors of 11 May 2004.

Fininvest’s statement continues to be confirmed by the fact that Mediaset independently sets its own

strategy and has full organisational, management and negotiating autonomy, as it is not subject to any

steering or coordination of its business operations by Fininvest. Specifically, Fininvest does not issue

any directives to Mediaset nor does it provide assistance or technical, administrative or financial

coordination on behalf of Mediaset and its subsidiaries.

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The purchases must be made in the listing exchange, by the operational methods of article 144-bis letters b) and c) of the Issuers Regulation, at a

price no higher than the greater of the price of the latest independent trade and the price of the highest independent bid currently in effect in the

electronic stock market managed by Borsa Italiana. Purchase transactions are carried out in compliance with Articles 2357 et seq. of the Italian Civil

Code, Article 132 of Legislative Decree 58/98, Article 144-bis, of the CONSOB Regulation implementing Legislative Decree 58 of 24 February 1998,

governing Issuers and in compliance with any other applicable regulations, including those referred to in EU Directive 2003/6 and all relative EU and

national implementing regulations.


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Mediaset currently carries out management and coordination activities, as per articles 2497 et seq. of

the Italian Civil Code, over Mediaset Group companies9 and over the listed subsidiary EI Towers S.p.A.

3. COMPLIANCE

Mediaset endorses the Corporate Governance Code for Listed Companies.

In March 2000, the Board of Directors of Mediaset decided to adopt the measures contained in the first

version of the Corporate Governance Code, incorporating the principles of the Code into the Mediaset

Code. The Company has continued, over time, to update its own system of corporate governance to

align it with best national and international practices, with recommendations of the Corporate

Governance Code for Listed Companies, and with provisions that have gradually been introduced, while

informing shareholders and the market on an annual basis.

Subsequently, the Board of Directors, taking into account the opinions and proposals of the Governance

and Appointments Committee, with the approval of the Risk and Control Committee, in its resolution of

18 December 2012, adopted the Corporate Governance Code for Listed Companies.

Finally, on 20 December 2016, taking into account the opinions and proposals of the Governance and

Appointments Committee, the Board decided to adopt the new recommendations introduced in the most

recent version of the Code (July 2015). As will be illustrated in the individual chapters that follow,

certain of the new provisions introduced were already applied in practice in the Company.

The Annual Report on Corporate Governance and Ownership Structure has been prepared on the basis

of the “Reporting Format on Corporate Governance and Ownership Structures” (VI edition, January

2017) issued by Borsa Italiana S.p.A.

The subsidiary EI Towers S.p.A., listed on the Electronic Stock Market (MTA) Star Segment of Borsa

Italiana S.p.A., has also endorsed the Corporate Governance Code.

The subsidiary Mediaset España Comunicación S.A., listed on the Madrid, Barcelona, Bilbao, and

Valencia Stock Exchanges and on the Spanish electronic stock market – Ibex 35 and its subsidiaries are

subject to Spanish Law and to the Spanish corporate governance system.

4. BOARD OF DIRECTORS

4.1 APPOINTMENT AND REPLACEMENT

The appointment and replacement of directors are regulated by Article 17 of the Company Bylaws,

included in Attachment A to this Report.

Based on the Company Bylaws, lists may be presented only by shareholders who have voting rights and

who, either alone or together with other shareholders, represent at least 2.5% of the share capital

consisting of shares with voting rights at the Ordinary Shareholders' Meeting, or any different

percentage established by pro tempore laws in effect and which, will be indicated each time in the notice

of the Shareholders' Meeting called to resolve on the appointment of the Board of Directors10.

We report that, besides the requirements of the T.U.F., Issuers Regulation, the Corporate Governance

Code, and legal requirements, Mediaset is not subject to additional requirements regarding the

composition of the Board.

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Specifically, over the following companies: Digitalia ’08 S.r.l., Elettronica Industriale S.p.A., Mediaset Premium S.p.A., Media4commerce S.p.A.,

Medusa Film S.p.A., Monradio S.r.l., Promoservice Italia S.r.l., Publitalia ’80 S.p.A., R.T.I. S.p.A., , RadioMediaset S.p.A., Radio Engineering Co S.r.l.,

Radio Studio 105 S.p.A., Taodue S.r.l., Video Time S.p.A. and Virgin Radio Italy S.p.A.

10

At the date of the Shareholders’ Meeting (29 April 2015), the threshold percentage of shares required to submit lists of cand idates was 1% (Consob

resolution No.19109 of 28 January 2015).


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Succession Plans

At this stage, the Board of Directors does not deem it necessary to adopt a succession plan for the

executive directors, given the stable shareholding structure, which is able to ensure that new

appointments are made rapidly, and the current system of delegated powers. Furthermore, the

Company can rely on directors with long and consolidated experience in managing the Company and

first-line managers of reliable skill and expertise, able to ensure the continuity of the Company’s

business. Therefore, no succession plans for directors exist.

4.2 COMPOSITION

Article 17 of the Company Bylaws establishes that the Company is administered by a Board of Directors

consisting of five to twenty-one directors.

The Shareholders' Meeting of 29 April 2015 resolved that the Board of Directors would consist of

seventeen members and would remain in office for three years (until the approval of the financial

statements to 31 December 2017).

As of today, the members of the Board of Directors are:

Fedele Confalonieri, Pier Silvio Berlusconi, Giuliano Adreani, Mauro Crippa, Marco Giordani, Gina

Nieri, Niccolo’ Querci, Stefano Sala, Marina Berlusconi, Pasquale Cannatelli, Bruno Ermolli, Carlo

Secchi, and Michele Perini (chosen from the majority list, No. 1);

Franco Bruni, Alessandra Piccinino, Fernando Napolitano, and Wanda Ternau (chosen from the

minority list, No. 2).

Two lists were presented at the Shareholders' Meeting of 29 April 2015 (739,838,857 shares, or

62.63% of the share capital)11.

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

List 1Fininvest S.p.A.

(33.491% of share capital)

List 2Shareholders

(1.38% of share capital)

Fedele Confalonieri

Pier Silvio Berlusconi

Giuliano Adreani

Mauro Crippa

Marco Giordani

Gina Nieri

Niccolò Querci

Stefano Sala

Marina Berlusconi

Pasquale Cannatelli

Bruno Ermolli

Carlo Secchi

Michele Perini

Giovanna Dossena

Alfredo Messina

Antonella Carù

Attilio Ventura

Franco Bruni

Fernando Napolitano

Alessandra Piccinino

Wanda Ternau

55,75% (voting capital)


11

The first list was nominated by the shareholder Fininvest S.p.A. The second list was nominated by the following shareholders: Anima Geo Italia fund,

Anima Italia fund, Anima Star Italia Alto Potenziale fund, Anima Geo Europa fund, Anima Europa fund, Anima Trading fund, and Anima Visconteo fund;

Arca SGR S.p.A., manager of the fund Arca Azioni Italia; Ersel Asset Management SGR S.p.A. manager of the fund Fondersel PMI; Eurizon Capital

S.G.R. S.p.A. manager of the fund Eurizon Azioni Italia; Eurizon Capital SA manager of the funds: Eurizon Easy Fund – Equity Italy, Eurizon Easy Fund –

Equity Italy LTE, and Eurizon Investment SICAV – PB Flexible Marco; Fideuram Investimenti S.G.R. S.p.A. manager of the fund Fideuram Italia;

Fideuram Asset Management (Ireland) Limited manager of the funds: Fideuram Fund Equity Italy and Fonditalia Equity Italy; Interfund Sicav manager of

the fund Interfund Equity Italy; Legal & General Investment Management Limited – Legal & General Assurance (Pensions Management) Limited;

Mediolanum Gestione Fondi SgrpA manager of the fund Mediolanum Flessibile Italia; Mediolanum International Funds Limited – Challenge Funds –

Challenge Italian Equity; Pioneer Asset Management S.A. manager of the fund Pioneer Fund Italian Equity and Pioneer Investment Management SGRpA

manager of the fund Pioneer Italia Azionario Crescita.


10

The curricula vitae of the members of the Board may be consulted on the Company’s website and are

also shown in Attachment B to this report.

The composition of the Board has not changed since the end of the reporting period.

Maximum number of positions held in other companies

On 24 March 2015, the Governance and Appointments Committee confirmed the preference already

expressed on 11 March 2008 regarding the maximum number of director or statutory auditor positions

compatible with an efficient performance of the mandate. In particular:

- an executive director should not hold:

I. the position of executive director in any other listed company, either Italian or foreign, or in a

finance, banking or insurance company, or in large-sized companies (with a net equity of more

than EUR 10 Billion);

II. the position of non-executive director or statutory auditor, or of member of another control

body, in more than five listed companies, either Italian or foreign, or in finance, banking or

insurance companies, or in large-sized companies (with a net equity of more than EUR 10

Billion);

- a non-executive director should not hold:

I. the position of executive director in more than three listed companies, either Italian or

foreign, or in finance, banking or insurance companies, or in large-sized companies (with a net

equity of more than EUR 10 Billion) and the position of non-executive director or statutory

auditor, or of a member of another control body, in more than five listed companies, either

Italian or foreign, or in finance, banking or insurance companies, or in large-sized companies

(with a net equity of more than EUR 10 Billion).

II. the position of non-executive director or statutory auditor, or of a member of another control

body in more than ten listed companies, either Italian or foreign, or in finance, banking or

insurance companies, or in large-sized companies (with a net equity of more than EUR 10

Billion).

The acceptance of a position, for all directors of the Company, requires their prior evaluation as to the

possibility of being able to dedicate the time needed to diligently carry out the high-level duties

entrusted to them and undertake consequent responsibilities. This means taking into account, among

other things, the number of positions held as director and/or statutory director in other companies

listed on regulated markets (including foreign markets), and in finance, banking or insurance companies,

or in large-sized companies.

Positions held in Mediaset and companies of the Mediaset Group are excluded from limits on the number

of positions held.

If the above limits are exceeded, directors shall promptly inform the Board, which will evaluate the

situation in the light of the Company’s interests and request the director involved to take ensuing

decisions.

On an annual basis, the Board of Directors identifies, from information received from each director, the

positions they hold as director and/or statutory auditor in other companies, included in Attachment B to

this Report.


11

Induction Programme

Consistently with Company practice, in order to enhance the awareness of all directors and statutory

auditors of the Company’s dynamics and reality and encourage greater understanding of the sector in

which the Company operates and the legal and governance frameworks, meetings were held during the

year to discuss specific business and corporate governance topics in depth, also through a structured

Induction programme.

After the current Board took office (2015), the 2015 Induction programme was intensified in order to

facilitate the integration of the new directors. In particular, a Board training plan was prepared to assist

the directors in performing their respective roles in an effective and informed way, as contemplated by

the Code. The training plan continued throughout 2016.

Company management and the management of subsidiary companies were involved in induction

sessions focused on:

the Enterprise Risk Management (ERM) system and its key features;

the general areas of the Mediaset financial statements and report on corporate governance and

ownership structure;

the Legislative Decree 231/2001 Compliance Programme of the Company and Group and the

Company’s Supervisory and Control Body;

Procurement Management;

Business Resilience Management;

workshop: ”Television Market Developments”;

a presentation of the radio broadcasting hub “RadioMediaset”;

workshop: “Market Abuse Regulation”;

advertising: Publitalia ‘80 and its subsidiaries;

television productions: guided tour of the Cologno Monzese television studios;

cyber security.

Respectively on 10 May and on 29–30 September, visits were organised to present the business and

operations of two listed subsidiaries of Mediaset Group at:

the registered office of EI Towers in Lissone;

the head office of Mediaset España Comunicatión S.A. in Madrid.

The Corporate Affairs Department organised seminars for the Board of Directors and the Board of

Statutory Auditors on key reforms in the legislative and regulatory frameworks during the year,

focusing on the Market Abuse Regulation, which became effective as of 3 July, and “additional periodic

financial information”, mandatory as of 2 January 2017.

The Company’s auditors were invited to attend these seminars.

Finally, also in view of the findings of the “Board Performance Evaluation”12 for the 2015 financial year,

the Company organised a “Strategy Day” on 11 October 2016. This event drew the participation of

directors, statutory auditors, and all top line management, including the executive directors of the main

subsidiaries. The purpose was to analyse in depth market dynamics and strategies, broadcasting

developments, new trends in the advertising market, and the responses of the Company to the new

competition challenges.

12

This topic is discussed in the successive Chapter 4.3 Role of the Board of Directors, “Self-assessment of the Board of Directors.”.


12

The Company has already scheduled more induction sessions for 2017.13

4.3. THE ROLE OF THE BOARD OF DIRECTORS

The Board of Directors is the collective body of the Company responsible for company administration. It

plays a key role in the Company’s organisation, overseeing functions and responsibility for its strategic

and organisational guidelines, checking the existence of controls necessary to monitor the performance

of the Company and Group. The system of delegation of powers is such that the central role of the

Board is maintained within the Company's organisation. The powers provided by the law and by art. 23

of the Bylaws belong to the Board14. In addition, the Board performs the activities assigned to it by the

Code.

The Board meets on a regular basis, observing the deadlines established by law and a working calendar.

It is organised and operates in such a way as to guarantee it perform its functions effectively and

efficiently.

The Board met nine times during the financial year. The average duration of each meeting was about

1.5 hours. The overall percentage of directors attending during the financial year was approximately

98%, while the percentage of independent directors attending was approximately 98% overall. The

attendance rate of each director attending Board Meetings is shown in Annex C to this Report.

During the year, no director had an attendance rate at meetings of less than 75%.

The Board devoted to the topics in the agenda the time required to allow a constructive debate,

encouraging the input of the individual directors.

Four board meetings have been held in 2017 and four more have been scheduled and announced to the

market to approve the financial statements for the respective periods.15

The Chairman ensures timely and complete information is given to directors prior to board meetings;

parties concerned receive documents about items on the agenda, in the days immediately before the

scheduled date of the Board Meeting (usually 4 days before), so they have useful elements enabling

them to participate effectively in the proceedings of the Meeting. For this purpose, the Chairman is

assisted by the Secretary of the Board of Directors. In relation to Board meetings held in 2016, the

minimum number of four was met. In the limited and exceptional cases in which it is not possible to send

the documentation sufficiently in advance, the Chairman ensures that adequate and detailed

examinations are carried out during the Board meetings, thus guaranteeing the adoption of informed

decisions.

Informing the Board was facilitated by the establishment of the “Mediaset Board Portal” which makes it

possible to make available to the directors and statutory auditors the documents related to the meetings

of the Board and its committees, through secure access by browser from a device connected to the

internet. A Document Kit, the Group press review and the Communication Library are also accessible

through the Mediaset Board Portal. In view of the outcomes of the last Board Performance Evaluation,

two new sections were introduced on the Mediaset Board Portal:

Stock Info, focused on Mediaset’s stock performance;

13

To date, three sessions have been held with the Radio Business Department, the Digital Business Department, and the Technology Department.

14

The Board of Directors may, pursuant to the Company Bylaws, appoint one or more Deputy Chairmen and assign one or more of its members, also

holding the position of Chief Executive Officer, all or a part of its powers, without prejudice to the provisions in Article 2381 of the Italian Civil Code

and Article 23 of the Company Bylaws, and may also appoint an Executive Committee to be assigned powers, except for powers reserved for the

Board of Directors. The Board of Directors may also establish other Committees, comprising persons that are not necessarily Board members,

defining their duties, powers, compensation, if any, composition and operating procedures.

15

In this regard, Mediaset has published a calendar, which is available on the Company’s website.


13

Advertising Info, dedicated to the Strategic Market and focused on competition in the Total

Video and Total Audience segments.

In its Board Performance Evaluation, the Board underscored that the information provided to directors

was always complete, as concerns both information provided by units through the portal and

information for Committee activities.

The Chairman encourages the involvement of company executives responsible for company

departments in Board Meetings, so they may give board members appropriate in-depth information to

fully understand items on the agenda. In 2016 company executives took part in Board meetings,

including: the Financial Reporting and Consolidated Reporting Officer, the Accounting Policies and Risk

Officer, the Head of the Communication and Image Department, the Head of the Legal Affairs

Department, and the Head of the Corporate Affairs Department (who is also designated Secretary of the

Board).

During the year, the Board jointly:

examined and approved the strategic, industrial and financial plans of the Company and of

Group of which the Company is the parent company and periodically monitored their

implementation;

defined strategic objectives, the nature and level of risk compatible with them, and monitored

their implementation during the year; based on the above, it examined and approved the three-

year economic/financial forecasts of the Group;

assessed, on the basis of the Governance and Appointments Committee Report identifying

strategic subsidiaries, the adequacy of the organisational, administrative and general

accounting set up of the Company and its strategic subsidiaries, with particular reference to the

internal control and risk management system; This review, with a positive outcome, was

supported by specific explanatory reports, relative to the different operational and control

structures of the companies, drawn up by delegated bodies;

positively reviewed the general progress of operations, specifically taking into account

information from the Executive Committee, Chairman, Deputy Chairman and Chief Executive

Officer, and Risk and Control Committee, and periodically comparing actual and planned results;

examined and approved, in advance, all operations that were significant from a strategic,

economic and financial viewpoint for the Company and its subsidiaries and, specifically, related-

party transactions;

set the Company’s Policy for the compensation of directors and key management personnel, on

the proposal of the Compensation Committee;

reviewed the functioning of the Board and its committees;

based on reports from subjects appointed to supervise the internal control and risk management

system, the Supervisory and Control Body and after consulting with the Risk and Control

Committee, reviewed the internal control and risk management system, which in overall terms is

adequate and effective for the business and risk profile of the Company;

after consulting with the Risk and Control Committee, the Board of Statutory Auditors and

Internal Control and Risk Management System Director, approved the work plan prepared by the

Internal Audit Function; it also reviewed the Internal Audit Function’s Report on its activities

carried out during the financial year and considered the resources assigned to the Function as

appropriate;


14

consulted with the Board of Statutory Auditors and the Risk and Control Committee and

subsequently evaluated the findings of the auditors in their letter and in the report on

fundamental issues arising during the audit; the Committee also acknowledged that the

Independent Auditors, in the absence of observations to bring to the attention of Management,

did not issue a letter of recommendations;

approved interim financial reports. On these occasions, the Board received information

regarding the results achieved, compared to historical data and budget objectives.

At the meeting held on 17 January 2017, the Board defined the Mid – term guidelines and economic

financial targets that Company management presented to financial analysts in London on 18 January

2017.

On 19 April 2017, at the proposal of the Compensation Committee, the Board set the general

compensation policy for directors and key management personnel for the year 2017.

Self-assessment of the Board of Directors

In accordance with the Code’s requirements, the Board conducts an annual self-assessment process,

first introduced in 2006. In this process, the composition, number of board members and operation of

the Board and its committees are assessed, as well as directors’ contributions to activities.

In 2016, the Board duly conducted the self-assessment process.

At the proposal of the Governance and Appointments Committee, and considering the positive

experience of the previous year, the Board decided to continue with the same procedures for the self-

assessment process adopted in 2015, working with the external advisor Spencer Stuart (a specialised

consultancy that has no other professional or commercial dealings with the Company or other Group

companies) to ensure the continuity of the process.

The self-assessment process started with the preparation of guidelines to support exchanges among

directors that took place during a meeting held on 20 December 2016 in which 13 of the 17 directors in

office, including the Chairman, participated, facilitated by the advisor Spencer Stuart.

The specific aspects analysed in the meeting included:

the status of actions decided in the last self-assessment process;

the operation of the Board as a whole;

the size and composition of the Board.

The self-assessment process produced the outcomes reported in brief below.

The Board positively assessed the effectiveness of action implemented on the basis of the indications

that emerged through the last self-assessment process (2015) and expressed its appreciation for the

constant monitoring of what remains to be done, on which the Board will continue working. One

recommendation of the last self-assessment process was that induction sessions and the Strategy Day

should continue to be organised.

The directors, in particular the independent directors, expressed their satisfaction with the effectiveness

of the induction session and “pre-Board” meetings organised throughout the year by the Corporate

Affairs Department.

The sessions focused on risks that were organised during the year were found to be highly useful by the

independent directors, in particular the sessions dedicated to ERM and cyber security. Appreciation was

also shown for the Strategy Day initiative focused on the market and strategies, as it enabled greater

understanding of the competition scenarios, impacts, opportunities, and risks associated with digital

transformation and developments in the domestic and international markets, including the growing

importance of partnerships and alliances, tools and external influences. It was recommended that the


15

initiative should become an annual event. Induction initiatives are reported in chapter 4.2 Composition –

Induction Programme.

Another outcome stressed the positive role played by the Chairman in guiding and involving colleagues

in debate, leading the Board to make unanimous decisions on complex and delicate matters. It was also

underscored that the information provided to directors was always complete, as concerns both

information provided by units through the portal and information for Committee activities. In particular,

ongoing support from the Board's secretarial department, including the recording of meeting minutes,

was greatly appreciated. The frequency and duration of Board meetings were considered appropriate.

As concerns the Committees, their work was considered highly useful, both by the Board members

directly involved in committee work and the directors who receive their output and recommendations at

Board meetings.

The directors all agreed that their discussions confirmed the positive and contributive spirit of the

directors and the progress made compared to the previous year, both in terms of a more comprehensive

understanding of the Group and its business and open and constructive debate with management.

With regard to the size and composition of the Board, the directors agreed that the matter will be

addressed in a future meeting, when market announcements are to be made on matters concerning the

appointment of a new Board (2018),16 drawing on consultation with the Governance and Appointment

Committee.

The suggestions made by the directors during the meeting, which will form the basis for discussion for

the next Board Performance Evaluation planned for next December, consisted essentially of the

organisation of a 2017 Strategy Day, with top management asked to present strategy alternatives and

report on what major competitors at the international level are doing, and the organisation of new

induction sessions for continuing updates on key issues and to monitor the implementation of operating

guidelines and progress made towards medium-term economic and financial objectives. Finally, it was

proposed that regular reports should be provided by top management to the Board of Directors,

especially on strategic issues and the international framework.

Article 2390 of the civil code

The Shareholders' Meeting has not authorised any departures from the prohibition on competition

established by Article 2390 of the Italian Civil Code.

4.4 DELEGATED BODIES

The Chairman

Traditionally, the Chairman is appointed by the Shareholders' Meeting . The Shareholders' Meeting of 29

April 2015 confirmed Fedele Confalonieri as Chairman of the Company.

At its meeting of 30 April 2015, the Board of Directors assigned to the Chairman all ordinary and

extraordinary administration powers within a maximum limit of € 15,000,000 for an individual

transaction, except those under the exclusive jurisdiction of the Board of Directors and Executive

Committee. Pursuant to the Company Bylaws, the Chairman represents the Company.

Board members are required to know the duties and responsibilities of their position. The Chairman

ensures that the Board is constantly kept informed on the main changes in laws and regulations that

concern the Company, also in collaboration with the Corporate Affairs manager and the Board's

secretary.

16

The Corporate Governance Committee of Borsa Italiana stressed in its last annual report on the application of the Corporate Governance Code,

dated 13 December 2016, the need for outgoing Board members to take greater responsibility in identifying, through the self-assessment process, the

expertise required of future directors and underscored the importance of consultation with the appointments committee even in companies with a

highly concentrated ownership structure.


16

The Chairman coordinates the activities of the Board of Directors and chairs the Board Meetings. The

Chairman, or person acting on his behalf, convenes Board Meetings.

Deputy Chairman and Chief Executive Officer

In the meeting of 30 April 2015, the Board of Directors appointed Pier Silvio Berlusconi as Deputy

Chairman and Chief Executive Officer, giving him all powers of ordinary and extraordinary

administration within a maximum limit of € 15,000,000 for an individual transaction, except those

under the exclusive jurisdiction of the Board of Directors and Executive Committee. Pursuant to the

Bylaws, the Deputy Chairman and Chief Executive Officer has the power to represent the Company.17

***

The Board of Directors unanimously decided that the above division of powers to the Chairman and to

the Deputy Chairman and Chief Executive Officer best meets the needs of organisational efficiency, as

evidenced by the historical cooperation of the two officers and absence of conflict.

Executive Committee

At its meeting of 30 April 2015, the Board of Directors appointed the Executive Committee which

consists of five members who will remain in office for the duration of the mandate of the Board,

appointing as members by right, besides the Chairman Fedele Confalonieri and the Deputy Chairman

and Chief Executive Officer Pier Silvio Berlusconi, the directors Giuliano Adreani, Marco Giordani, and

Gina Nieri.

The Board assigned to the Executive Committee all powers of ordinary and extraordinary administration

within the maximum limit of € 130,000,000.00 for an individual transaction, excluding the matters

under the exclusive jurisdiction of the Board.

During 2016, the Committee met nine times and systematically involved the Company's executives

responsible for the pertinent departments. The average duration of the meetings was about one hour.

As a rule, all members of the Board of Statutory Auditors participate in Committee meetings.

The percentage of each director attending Committee meetings is shown in Attachment C to this Report.

***

Reporting to the Board of Directors

In compliance with laws and the Company Bylaws, the Board of Directors and Board of Statutory

Auditors are informed of the activities carried out, operations, their outlook, and the most important

strategic, economic, balance sheet, and financial operations carried out by the Company or subsidiaries.

During Board Meetings, each item is reviewed thoroughly, to enable directors to make an informed

decision on the matters discussed.

Information on the delegated activities is reported continuously by the delegated bodies to the Board of

Directors and Board of Statutory Auditors during Board meetings, in accordance with the methods

provided by the Bylaws and required by laws in force. During the first available board meeting, the

Chairman, Deputy Chairman and Chief Executive Officer, Executive Committee, directors with special

assignments, and, more generally, the delegated bodies report to the Board of Directors and Board of

17

Pursuant to the Bylaws, the Deputy Chairman replaces the Chairman if the latter is absent or incapacitated. The actual exercising of the power of

representation by the Deputy Chairman indicates per se the absence or impediment of the Chairman and exonerates third parties from any

verification or responsibility thereof.


17

Statutory Auditors on the progress of the projects assigned to them and of the activities performed

when fulfilling the mandates assigned to them, as provided by the Bylaws.

4.5. OTHER EXECUTIVE DIRECTORS

In addition to the Chairman and the Deputy Chairman and Chief Executive Officer the following six

executive directors are members of the Board:

Giuliano Adreani Chairman of Publitalia '80 S.p.A., Chairman of Digitalia '08 S.r.l., and

Chairman of Mediamond S.p.A.

Mauro Crippa General Manager IT for RTI S.p.A.

Marco Giordani Central Manager of Administration, Finance, Control and Business Development at Mediaset

S.p.A., Managing Director of RTI S.p.A., Chairman of Mediaset Premium S.p.A., Chairman of

Monradio S.r.l, Chairman of RadioMediaset S.p.A and Chairman of Virgin Radio Italy S.p.A.

Gina Nieri Department of Institutional and Legal Affairs and of Strategic Analysis of Mediaset S.p.A. and

Deputy Chairman of RTI S.p.A.

Niccolò Querci Central Manager of Human Resources, Procurement, and Services of Mediaset S.p.A., Deputy

Chairman of RTI S.p.A., and Deputy Chairman of Publitalia ‘80 S.p.A.

Stefano Sala Chief Executive Officer of Publitalia '80 S.p.A., Chief Executive Officer of Digitalia '08 S.r.l., and

Deputy Chairman of Mediamond S.p.A.

4.6. INDEPENDENT DIRECTORS

The six independent Directors appointed by the Shareholders' Meeting of 30 April 2015 are: Franco

Bruni, Fernando Napolitano, Michele Perini, Alessandra Piccinino, Carlo Secchi, and Wanda Ternau18.

At the Board meeting of 10 May 2016, the Board assessed the independence of its directors pursuant to

Article 147 ter of the T.U.F. and to the Code, on the basis of the declarations available to the Company,

as shown in Annex C to this report. The Board found that the independent directors satisfy the

independence criteria required by Article 148, paragraph 3 of the T.U.F. and the independence criteria

required by the Code. With regard to the latter requirement, the Board recognised the director Carlo

Secchi as an independent director, although he has held the office of director of the Company for over

nine years during the past twelve years, in consideration of the independent judgement that he displays

continuously and of his professional qualities.

More recently, at the Board meeting held on 19 April 2017, the Board assessed the independent status

of its directors under Article 147 ter of the T.U.F. and under the Code on the basis of the statements

provided by the directors. It was found that the directors Franco Bruni, Fernando Napolitano, Michele

Perini, Alessandra Piccinino, Carlo Secchi, and Wanda Ternau satisfy the independence criteria required

by Article 148, paragraph 3 of the T.U.F. and the independence criteria required by the Code. With

reference to the latter, the Board recognised the director Carlo Secchi as an independent director on

the basis that he had demonstrated, through his skill and expertise and constant contribution to the

Board, his independence and freedom of judgement in assessing the work of management. Furthermore,

his long experience as a Company director and in-depth knowledge of the Company and the market in

which it operates enables him to make an important contribution to the Board’s work and, in general, to

identifying strategic Company policy.

18

The current composition of the Board of Directors, with 6 independent directors out of 17, complies also with application criterion 3.C.3 of the

Corporate Governance Code which requires that, in the companies included in the FTSE-Mib index, at least one third of the Board of Directors be

independent directors.


18

The Board assesses the independence of its non-executive members paying attention more to the

substance than to form and taking into account that normally a director does not appear independent in

the cases contemplated by the Code.

Each independent director has undertaken to communicate promptly to the Board the occurrence of

situations that cause the requirement not to be satisfied.

The Board of Directors periodically reviews the independence of the directors, also assisted by the

Governance and Appointments Committee. The Board of Statutory Auditors has verified the correct

application of the verification criteria and procedures adopted by the Board of Directors to assess the

independence of the directors during the financial year.

The number of Independent Directors and their expertise are appropriate for the size of the Board and

operations carried out by Mediaset, and are such as to enable Committees to be established within the

Board of Directors, as described in full in this report.

The Chairman operates so that the Board, as a whole, is updated on an ongoing basis and during board

meetings on main legal and regulatory developments concerning the Company; this occurs regularly

during the Board meetings. It is a consolidated practice for the Independent Directors to periodically

meet with the Chief Financial Officer and management of the Company and its subsidiaries to provide an

overview of the Group’s structure and knowledge of its business operations, in order to further

investigate specific economic, financial and corporate governance issues. As a rule, all members of the

Board of Statutory Auditors participate in these initiatives.

During the financial year, the independent directors participated in various initiatives19 intended to

inform them on the main aspects of the Company’s activities and to increase their knowledge of the

Company’s dynamics.

Independent Directors’ Meeting

The Independent Directors were called to a meeting, without the other directors, once during the year,

on 14 December 2016. Various topics were discussed during the meeting. In particular, the directors

agreed there was no need to appoint a Lead Independent Director, given the current system of

delegated powers. They also decided it would be useful to hold independent directors’ meeting and

meeting with the Chairman on a more regular basis. With regard to the Board’s self-assessment, in view

of the Board Performance Evaluation for the year 2017, they suggested that individual interviews

should also be conducted for the purposes of the Board Performance Evaluation. Finally, they

encouraged directors to work more closely in view of strategic transactions.

4.7 LEAD INDEPENDENT DIRECTOR

The Board decided not to implement the recommendation of the Code that provides for the office of

“lead independent director,” as the prerequisites for this office are not in place. At their meeting on 14

December 2016, the independent directors agreed that there is no need to appoint a Lead Independent

Director given the current system of delegated powers.

At present, the current corporate governance structure guarantees not only constant information flows

to all executive and non-executive directors, both independent and non-independent, but also the broad-

ranging and proactive involvement of all directors in the operations of the Company.

19

Can be consulted at chapter 4.2 Composition - “Induction Programme”.


19

5. THE PROCESSING OF COMPANY INFORMATION

Market Abuse Regulation

On 3 July 2016, the provisions of the Market Abuse Regulation entered into force. The new regulation

provides a comprehensive, and in certain respects innovative, regulatory framework governing the

abuse of inside information and market manipulation. The main reforms concern, among many things,

the expansion of the concept of inside information and rules for delayed disclosures, the List of Insiders

and transactions performed by managers.

The Board is constantly kept up to date on the new regulation and developments in the legal framework

and has adopted measures and specific procedures to ensure compliance in areas affected by the MAR.

Inside information

On 28 February 2017, on the recommendation of the Internal Risk and Control Committee, the Board

approved a new version of the Inside Information Procedure.20 On 28 July 2016, on the

recommendation of the Internal Risk and Control Committee, the Board identified the people to be

registered in the permanent section of the List of Insiders.

The Inside Information Procedure was adopted in accordance with the Market Abuse Regulation to

comply with national and European laws and regulations in force governing the abuse of inside

information.

The Inside Information Procedure addresses the internal management and disclosure to the public of

inside information concerning the Company and its subsidiaries and the keeping of the “List of Persons

having Access to Inside Information.” The Inside Information Procedure is an essential component of

Mediaset’s internal control and risk management system and is incorporated into the rules and

regulations adopted by Mediaset in accordance with Legislative Decree 231/01 in an effort prevent

corporate crime.

The Inside Information Procedure applies to the directors, statutory auditors and employees of the

Company and its subsidiaries, as well as to external parties that act in the name and on behalf of the

Company and its subsidiaries, with the exception of the listed subsidiaries EI Towers S.p.A. and

Mediaset España Comunicación S.A., which are required to keep their own lists of insiders and comply

with the relative requirements and to disclose information to their markets of reference.

The directors and statutory auditors of the Company and, in general, all other recipients of the Inside

Information Procedure are required to keep all documents and information that come to their knowledge

when carrying out their duties strictly confidential, with particular reference to inside information.

Disclosure to the authorities and public takes place according to the deadlines and procedures of laws in

force, in compliance with parity of information and the procedure.

The Company has distributed the Inside Information Procedure to its own personnel and to the

personnel of its subsidiaries and has published the procedure on the company intranet.

The Chief Financial Officer of the Company is tasked by the Board with the constant monitoring of the

application of the Inside Information Procedure, reporting thereon to the Risk and Control Committee,

and of its updating status, working with the relevant internal departments, also in view of the best

practices in the area, in order to determine its effectiveness.

20

The updated Inside Information Procedure replaces the former “Inside Information Management and Disclosure” Organisational Guidelines adopted

in 2006 and updated in 2015.


20

Internal dealing

On 28 February 2017, at the proposal of the Risk and Control Committee, the Board approved a new

institutional Internal Dealing Procedure,21 in accordance with the Market Abuse Regulation. The purpose

of the Internal Dealing Procedure is to govern trading performed, directly or through an intermediary,

by relevant persons and persons closely related to them, as identified by the regulation, setting forth

the obligations, terms and methods for disclosing transactions performed by them in relation to

Company financial instruments.

Specifically, the procedure designates the Corporate Affairs Department of Mediaset as the office

responsible for receiving, managing and disclosing reports to the market.

All relevant persons are required to follow a specific procedure to notify the office of the details of

relevant transactions in order to comply with the requirements of laws in force.

The Chief Financial Officer of the Company is tasked by the Board with the constant monitoring of the

application of the Internal Dealing Procedure, reporting thereon to the Risk and Control Committee, and

of its updating status, working with the relevant internal departments, also in view of the best practices

in the area, in order to determine its effectiveness.

Finally, in compliance with the Market Abuse Regulation and the Internal Dealing Procedure, black-out

periods have been introduced banning trading by relevant persons for the 30 calendar days preceding

the announcement of the annual financial statements and the half-year financial report, published by

the Company in accordance with law or on a voluntary basis.

In compliance with CONSOB recommendations, the Company has created a specific “Internal Dealing”

section on its website.

6. COMMITTEES WITHIN THE BOARD OF DIRECTORS

The Board of Directors22 established the following internal committees, all with proposal and consulting

functions:

- the Risk and Control Committee was assigned the responsibilities of the Code; on 20 December

2016, at the proposal of the Governance and Appointments Committee, the Risk and Control

Committee was tasked with the “supervision of sustainability issues connected with the running

of the company and how it engages with shareholders”;

- the Board meeting of 30 April 2015 confirmed to the Compensation Committee the

responsibilities assigned to it in 2011;

- the Governance and Appointments Committee retained the existing responsibilities appropriate

to guarantee the update of the governance rules and the adequacy, implementation, and

enforcement of said rules, in addition to those contemplated by the Code for the Nominations

Committee.

The Committees established within the Board have investigative and/or advisory duties regarding

aspects requiring further examination, in order to exchange actual and informed opinions. The

establishment and operation of the Board of Director's internal committees satisfy the Code's criteria.

21

The new institutional procedure replaces the former practices adopted by the Company as of 2006. 22 Pursuant to the Company Bylaws, the Board of Directors may establish Committees, also comprising persons who are not Board members, identifying their duties, powers, compensation and number. The Committees, if comprising persons who are not Board members, only have advisory powers.


21

In carrying out their functions, the Committees may access the information and company functions

necessary to perform their duties, and may be assisted by external consultants at the Company's

expense, within the limits of the budget approved by the Board of Directors.

The Committees, who routinely report to the Board on their activities, have operating regulations and

scheduled meetings for each financial year. The regulations of the Committees were approved by the

Board.

The Board, when adopting the procedure to regulate transactions with related parties (addressing

Consob's requirements) established within itself the Committee of Independent Directors for Related-

Party Transactions23; the latter is asked to express specific opinions regarding transactions with related

parties carried out by the Company, either directly or through subsidiaries, in the cases indicated and in

accordance with the methods required by the above-mentioned procedure.

7. THE GOVERNANCE AND APPOINTMENTS COMMITTEE

The Governance and Appointments Committee includes three non-executive and independent directors

whose term in office lasts three years until the expiry of the mandate of the entire Board of Directors.

Carlo Secchi Chairman - Independent Director

Michele Perini Independent Director

Wanda Ternau Independent Director

The Committee has its own operating regulations and minutes are taken of all meetings. The Manager of

the Corporate Affairs Department, appointed as Committee Secretary, attends the meetings. In the days

preceding meetings, sufficiently in advance of the meeting, the Secretary, as agreed with the

Committee Chairman, sends to the Governance Committee members all available documents and

information on items on the agenda.

The Committee met six times during 2016. The average duration of each meeting is about one hour.


Eight meetings were scheduled for the year 2017 and two of them have been held.

As a rule, all members of the Board of Statutory Auditors took part in the meetings, and the managers

of specific company departments and external consultants were invited to attend by the Committee

Secretary, to explain particular issues.

The Committee members are given a fee for attending each meeting, in the amount set by the

Shareholders' Meeting of 29 April 2015.

Functions and activities of the Governance and Appointments Committee

The Board attributed to the Committee the responsibilities of Governance Committee and those that the

Code assigns to the Appointments Committee; specifically, it fulfils these tasks:

23

Refer to chapter 12, Interests of Directors and Transactions with Related Parties, section “Independent directors committee for related parties

transactions.”


22

regarding Corporate Governance:

- monitor compliance with and the periodic updating of corporate governance rules and compliance

with the principles of conduct adopted by the Company, reporting to the Board of Directors;

- propose procedures and deadlines for the annual self-assessment of the Board of Directors;

- review, in advance, the contents of the Annual Report on Corporate Governance and Ownership

Structures;

- assist the Board in evaluating whether Independent Directors meet requirements for independence,

on an ongoing basis.

regarding Appointments:

- give to the Board of Directors opinions on the size and composition of the Board, and

recommendations on the types of professional positions considered appropriate to sit on the Board,

as well as the maximum number of positions as director or statutory auditor compatible with being

able to effectively fulfil the mandate of director of the issuer, and on any departures from the

prohibition on competition established by Article 2390 of the Italian Civil Code;

- propose to the Board candidates to the office of director in the case that directors need to be co-

opted, when it becomes necessary to replace independent directors.

During 2016, the Committee carried out the activities under its responsibility; among other things, it:

- analysed the possibility of subjecting any new subsidiaries having strategic importance to the

provisions of the Corporate Governance Code;

- examined the report on the Board Performance Evaluation for 2015;

- reviewed the “2015 Report on Corporate Governance and Ownership Structures”;

- assisted the Board in the annual assessment of the independence of its directors;

- examined the amendments introduced to the Corporate Governance Code in the last version

updated to July 2015. Specifically, as regards the internal control and risk management system,

the Committee found that the Company’s corporate governance system is continuously updated to

comply with the Code and that internal control and risk management measures are constantly

implemented. On 20 December 2016, the Board approved the adoption of the most recent version

of the Corporate Governance Code;

- prepared, with the support of Spencer Stuart, a company specialised in the sector, the methods

and matters to be addressed by the Board’s self-assessment process for the year.

During 2017, the Committee:

- examined the report on the Board Performance Evaluation;

- reviewed the “2016 Report on Corporate Governance and Ownership Structures”;

- assisted the Board in the annual assessment of the independence of its directors.

The Committee Chairman informs the Board of the meetings held at the first available Board meeting.

When fulfilling its functions, the Committee had full access to the information and corporate

departments of the Company and/or Group needed for the purpose, with the assistance of the

secretary.

The Committee is given funding of EUR 100 thousand per annum for expenses related to its duties.




23

8. THE COMPENSATION COMMITTEE

The Compensation Committee consists of three non-executive directors, the majority of whom are

independent and will remain in office until the entire Board of Directors expires; experts in financial

matters and compensation policies are among them.

Michele Perini Chairman - Independent Director

Bruno Ermolli Non-executive Director

Fernando Napolitano Independent Director

No directors concerned took part in meetings of the Compensation Committee, when proposals to the

Board of Directors concerning their compensation were discussed.

The Committee has its own operating regulations and minutes are taken of all meetings.

The Committee met six times during 2016. The average duration of each meeting is about one hour.


Five meetings were scheduled for the 2017 financial year and two of them have been held.

Normally, the Chairman of the Board of Statutory Auditors and/or other designated members

participate in the Committee's meetings; a secretary, chosen each time by the Chairman, is also

present; the managers of specific company departments and outside consultants have been invited to

illustrate specific topics.



Functions and activities of the Compensation Committee

The Board assigned the following responsibilities to the Compensation Committee:

- to periodically review the adequacy, overall consistency and actual application of the general policy

adopted for the compensation of the Chairman, Deputy Chairman and Chief Executive Officer, and

key management personnel, using, as regards the latter, information supplied by the Chairman,

Deputy Chairman and Chief Executive Officer, and submitting the related proposals to the Board of

Directors;

- to provide advance opinions on the proposals of the Board of Directors, and on its behalf, proposals

of the Chairman and/or Deputy Chairman concerning the compensation of the Chairman, Deputy

Chairman and Chief Executive Officer and on setting performance objectives related to the variable

component of compensation; It also monitors the application of decisions taken by the Board;

- to provide advance opinions on the proposals of the Board of Directors, and on its behalf, of the

Chairman and/or Deputy Chairman and Chief Executive Officer concerning the definition by

Mediaset S.p.A.'s delegated bodies on the compensation of key management personnel and of the

other key executives of the Mediaset Group;

- to provide advance opinions on proposals of the Board of Directors, and on its behalf, of the

Chairman and/or Deputy Chairman and Chief Executive Officer concerning general regulations for

allocating compensation (allocation, rejection or reversal) to employees of the companies of the

Mediaset Group designated to fill positions in administrative and control bodies and/or in

committees appointed by administrative bodies of Italian or foreign subsidiaries or investee

companies;


24

- to make proposals to the Board of Directors concerning the criteria, beneficiary categories,

quantities, terms, conditions and procedures for share-based compensation plans.

During 2016, the Committee carried out the activities under its responsibility; among other things, it:

- analysed the findings and suggestions that emerged in the course audits conducted by the Hay

group S.r.l., a consultancy engaged for the purpose, on compensation policy and the format and

disclosure level of the Compensation Report. The Committee endorsed the suggestions and invited

the officers concerned to take the findings into account when preparing the Compensation Report,

the first section of which addressed policy;

- approved the Report on General Compensation Policies;

- conducted reviews following the outcome of Shareholders’ Meeting votes on the agenda item

concerning the Compensation Report; accordingly, the Committee engaged the company

Georgeson S.r.l. to start up a project of to support initiatives aimed at identifying the compensation

policy issues that led so many shareholders to vote against the report at the 2016 Shareholders’

Meeting. The project will support the company in aligning policy to the principles suggested by

institutional investors through a joint study of best practices in the sector and the voting policies

applied by those investors and to assess the content and format of the Compensation Report;

- expressed favourable opinion regarding the performance objectives set for the 2016 financial year

in connection with the variable component of the compensation of directors who occupy specific

positions (Chairman and Deputy Chairman - Chief Executive Officer);

- outlined, in relation to the medium/long-term incentive plan approved by the Shareholders’ Meeting

on 29 April 2015, a proposal concerning the objectives and categories of beneficiaries for the year

2016 and subsequently collected the preferred options of the beneficiaries for the variable portion

of their annual compensation;

- assessed (also on the basis of information exchanged with the central Human Resources and

Organisation department) and consistently and actually implemented the compensation policy

approved by the Shareholders’ Meeting.

During 2017, the Committee:

- acknowledged the new short-term Annual Incentive System (AIS);

- expressed favourable opinion regarding the performance objectives set for the 2017 financial year

in connection with the variable component of the compensation of directors who occupy specific

positions (Chairman and Deputy Chairman - Chief Executive Officer);

- was informed of the findings of the Georgeson S.r.l, the company tasked with identifying the critical

issues with the Company’s compensation policy, and conducted relative follow-ups;

- approved the Report on Compensation Policy and tasked the Committee Chairman with proposing

the report to the Board of Directors on 19 April 2017.


The Committee is given funding of EUR 200 thousand per annum for expenses related to its duties.




25

9. COMPENSATION OF DIRECTORS

On 27 April 2016, the Shareholders’ Meeting approved the first section of the Compensation Report,

pursuant to article 123-ter of Legislative Decree 58/1998, with 60.55% of votes in favour.

On 19 April 2017, the Board of Directors established a general policy for the compensation of executive

directors, other directors with special roles and key management personnel.

For further information relative to this section, reference is made to the relevant parts of the Report on

Compensation, published pursuant to Article 123-ter of the TUF.

10. RISK AND CONTROL COMMITTEE

The Risk and Control Committee consists of three independent non-executive directors who remain in

office for three years until the term of office of the entire Board expires; experts in accounting and

financial matters are among them;.

Carlo Secchi Chairman - Independent Director

Franco Bruni Independent Director

Fernando Napolitano Independent Director


the Corporate Affairs Department, appointed as Committee Secretary, attends the meetings. In the days

preceding meetings, sufficiently in advance of the meeting, the Secretary, as agreed with the



During 2016, eight meetings of the Risk and Control Committee were held. The Committee requested

the following non-members to attend meetings, as regards individual items on the agenda and relative

to their area of responsibility: the Supervisory and Control Body, the Financial Reporting Officer, the

Internal Audit Manager, persons from the independent auditors, managers of specific functions of the

Company and/or Group, as well as external consultants where deemed appropriate. The average

duration of each meeting was about 1.5 hours. The percentage of each director attending Committee

meetings is shown in Attachment C to this Report. Eight meetings have been scheduled for the 2017

financial year.

As a rule, all members of the Board of Statutory Auditors took part in the meetings, and the managers





Functions and activities of the Risk and Control Committee

The Risk and Control Committee, besides assisting the Board in fulfilling the tasks assigned to the latter

on matters of internal control, fulfils the functions in line with those indicated in the Code.

On 20 December 2016, the Board tasked the Risk and Control Committee, in accordance with the

Corporate Governance Code, with supervising sustainability issues connected with the company’s

business and how it engages with stakeholders.

In order to allow the Board to guide the internal control and risk management system and assess its

adequacy, the Committee performs systematically during the year the support activities consisting of an

adequate investigative activity concerning the assessment of the Board’s decisions related to (besides


26

internal control and risk management) the approval of the periodic financial reports, including the

financial statements for the year.

During the year, the Committee examined, usually every six months, the periodic reports prepared by

the Supervisory and Control Body of Mediaset on audit outcomes and actions taken pursuant to

Legislative Decree 231/01, subsequently presented to the Board of Directors.

The Committee annually reviews activities carried out by the Financial Reporting Officer, pursuant to

Law 262/2005 on the Protection of Savings, for the purposes of issuing certification relative to the

Financial Statements and Consolidated Financial Statements, and the Risk Officer’s update on the

assessment and procedures for the management of main company, strategic and process risks, of the

Mediaset Group, carried out on an “Enterprise Risk Management” basis; this annual update is usually

carried out also by the respective managers of the listed subsidiaries EI Towers S.p.A and Mediaset

España Comunicación S.A.

During 2016, the Committee, among others:

took note of the summary of reports issued by the Internal Audit department and Final 2015

Report, as well as the results for 2015 of the “Quality Assurance and Improvement Plan”,

recommended by international reference standards for the industry, in order to guarantee more

effective monitoring of the department. The Committee monitored the work of the Internal Audit

Function, also through periodic audit reports, and the implementation of action plans on corrective

measures necessary to ensure continual improvement of the system;

approved the “2016 Audit Plan”, and also examined and took note of the Report on the Internal

Control and Risk Management System as of 31 December 2015, prepared by the Internal Audit

department;

examined and took note of the “2016 Audit Plan” and final audit results of the listed subsidiaries EI

Towers S.p.A. and Mediaset España Comunicación S.A. submitted by the respective managers;

evaluated together with the Financial Reporting Officer, the independent auditors Reconta Ernst &

Young S.p.A., and the Board of Statutory Auditors the accounting standards applied within the

Mediaset Group for the purposes and their uniformity, for the purpose of drafting the 2015

consolidated financial statements, believing that they are applied correctly, and also starting the

investigation activity related to the approval of the 2015 financial statements;

took note and discussed the methodology adopted and the different plan configurations supporting

evaluations relative to annual impairment testing;

approved Sections 10 and 11 of the 2015 Report on Corporate Governance relative to the Internal

Control and Risk Management System;

discussed the report on the basic issues of 2015 written by Reconta Ernst & Young S.p.A. pursuant

to Article 19, paragraph 3, of Legislative Decree No. 39 of 27 January 2010 and the report’s

conclusions and, in the spirit of the Code, decided to submit said report to the Board of Directors at

its meeting on 10 May 2016; the Committee also acknowledged that the Independent Auditors, in

the absence of observations to bring to the attention of Management, did not issue the

Management Letter at 31 December 2015;

was informed of the SIA Multinetwork Project adopted by the Finance Division to introduce a Digital

Signature–Strong Authentication system;

was informed of the amendments made to the guidelines for financial risk mitigation techniques for

the purposes of the EMIR (European Market Infrastructure Regulation);


27

it took note of periodic updates to the “List of broadcasting rights suppliers”, prepared by the

Rights Department of RTI S.p.A., to complete the company procedure for the planning, acquisition

and management of rights, and gave it a positive rating;

acknowledged that at 30 June 2016 no significant changes had emerged in the 2016 Audit Plan

prepared by the Internal Audit Department;

was informed that, in compliance with International Standards for the Professional Practice of

Internal Auditing, a Quality Assurance Review was underway of internal auditing activities. The

Internal Audit Department notified the need to conduct a new external review to obtain

certification for 2016, opting, as in 2011, for an approach based on a self-review convalidated by a

qualified and independent external assessor;

approved the list of names to be registered in the permanent section of the List of Insiders in

accordance with the provisions of the Market Abuse Regulation and Implementing Regulation (EU)

2016/347;

approved the amendments made to the “Guidelines for the Internal Control and Risk Management

System of Mediaset Group”;

monitored the adequacy, effectiveness and efficiency of the Internal Audit Function.

The Committee also discussed Company evaluations on organising the coordination flows of subjects

established by the Code, in order to ensure the efficiency of the Internal Control and Risk Management

System.

Activities continued during the first quarter of 2017, with four meetings held during which the

Committee:

took note of the summary of reports issued by the Internal Audit Department and of the Final 2016

Report, as well as the findings for 2016 of the “Quality Assurance and Improvement Plan.” The

Committee monitored the work of the Internal Audit Function, also through periodic audit reports,

and the implementation of action plans on corrective measures necessary to ensure continual

improvement of the system;

approved the “2017 Audit Plan”, and also examined and took note of the Report on the Internal

Control and Risk Management System as of 31 December 2016, prepared by the Internal Audit

department;

acknowledged and examined the amendments made to its operating regulations in the light of

reforms introduced by the Corporate Governance Code;

acknowledged and examined the updated version of the Inside Information procedure and the new

Internal Dealing Procedure, introduced in compliance with the new legislative and regulatory

framework governing market abuse; the procedures are an essential component of Mediaset’s

internal control and risk management system and are incorporated into the rules and regulations

adopted by Mediaset in accordance with Legislative Decree 231/01 in an effort prevent corporate

crime;

examined and took note of the “2017 Audit Plan” and final audit results of the listed subsidiaries EI

Towers S.p.A. and Mediaset España Comunicación S.A. submitted by the respective managers;

evaluated together with the Financial Reporting Officer, the independent auditors Reconta Ernst &

Young S.p.A., and the Board of Statutory Auditors the accounting standards applied within the

Mediaset Group for the purposes and their uniformity, for the purpose of drafting the 2016


28

consolidated financial statements, believing that they are applied correctly, and also starting the

investigation activity related to the approval of the 2016 financial statements;

took note and discussed the methodology adopted and the different plan configurations supporting

evaluations relative to annual impairment testing;

approved Chapters 10 and 11 of this Report relative to the Internal Control and Risk Management

System.


When the semi-annual financial statements and management letter are approved, the Committee

reports to the Board on the adequacy of the internal control system. During the activity described above

and also in view of the management policy for the control system adopted by the Internal Control and

Risk Management System Director on the basis of the guidelines of the Internal Control and Risk

Management System of the Mediaset Group issued by the latest Board of Directors meeting of 20

December 2016, the Committee recommended to the Board to consider the Internal Control and Risk

Management System to be adequate and effective overall, with respect to the profile and characteristics

of the Company and to the profile of risk assumed.

In carrying out its functions, the Committee accessed all necessary information and/or functions of the

Company and/or Group and/or was assisted by external consultants, as well as the Company Secretary.

The Committee is given funding of € 350,000 per annum for expenses related to its duties.



11. THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM

The internal control and risk management system comprises all rules, procedures and organisational

structures to perform business operations that are consistent with established objectives, through an

adequate process that identifies, measures, manages and monitors main risks.

The Board exercises the functions listed by the Code, with the assistance of the Risk and Control

Committee.

The Board carries out its functions related to the internal control and risk management system taking

into consideration reference models and existing best practices at the national and international level

and in accordance with the compliance programme adopted in accordance with Legislative Decree

231/2001.

On 22 March 2016, the Board of Directors, on the basis of the favourable opinion of the Risk and

Control Committee, examined the results of the Risk Officer’s annual update on the evaluation of and

methodologies of managing the main company, strategic and process risks, evaluating the nature and

level of risk compatible with the strategic objectives established in the preceding meeting of 15

December 2015.

During the meeting of 8 March 2016, the Board, based on Risk and Control Committee Reports, after

consulting with the Board of Statutory Auditors and Financial Reporting Officer, took note, with no

observations made, of the final data of the Audit Plan updated on 31 December 2015, and approved the

2016 Audit Plan prepared by the Internal Audit Department Manager.

On 20 December 2016, the Board of Directors, with the approval of the Risk and Control Committee and

as part of activities to monitor objectives and results, reviewed the main actions taken by the Group


29

during the year as regards the strategic objectives previously established and the relative risk level

accepted; it also updated the strategic objectives for the subsequent annual assessment of related risks.

The Guidelines of the Internal Control and Risk Management System of the Group, which identify the

Enterprise Risk Management Framework as the reference methodology24 for monitoring the internal

control system, are implemented, by the Internal Control and Risk Management System Director,

through the “Enterprise Risk Management Policy” , which defines the main methodological aspects of

the risk management process, as well as the roles, responsibilities and main activities involved in risk

management.

The internal control and risk management system of the Mediaset Group is able to identify and measure

the main company risks, including risks relevant to its medium/long-term sustainability, which could

undermine the achievement of established objectives, taking into account the characteristics of

activities carried out by Mediaset and its subsidiaries, based on the following criteria:

the nature of the risk, with reference to strategic and operating risks and risks concerning

reporting and compliance with laws in force;

the possibility of risk affecting the ability to achieve company objectives;

the organisation’s ability to properly manage identified risk;

the correct monitoring of company risks, by checking the suitability of the internal control and

risk management system to provide an acceptable profile of overall risk. Specifically, the

internal control and risk management system of the Mediaset Group establishes the following:

the systematic monitoring by management of main company risks, in order to identify

and implement any corrective actions for existing control processes;

periodic independent checks of the adequacy and effectiveness of the internal control

system, as well as the timely adoption of specific corrective actions if weaknesses are

identified;

rules for reporting on the adequacy and effectiveness of the internal control and risk

management system.

For this purpose, the Internal Control and Risk Management System Director supervises the

management of the Internal Control and Risk Management System of the Mediaset Group, to ensure the

system can:

promptly react to significant risk situations, establishing adequate control mechanisms;

guarantee, within the context of company processes, an adequate level of separation between

operating and control functions, thus preventing conflicts of interest arising regarding assigned

responsibilities;

guarantee, within the context of operating and administrative/accounting activities, the use of

systems and procedures that ensure the accurate recording of company events and operations,

as well as the production of reliable, timely information flows, both in and outside the Group;

establish methodologies for the timely communication of significant risks and control anomalies

identified in relation to appropriate Group levels, allowing for the identification and timely

adoption of corrective actions.

24

According to the Enterprise Risk Management methodology, the internal control system starts from the definition of the Company’s strategy. The

Company’s objectives are taken into consideration by the methodology according to the following categories:

- strategic objectives: high level objectives, aligned with and supporting the Company’s mission;

- operational objectives: objectives related to the efficient and effective use of resources;

- reporting objectives: objectives related to the reliability of reporting external and internal to the Company;

- compliance objectives: objectives related to compliance with applicable laws and regulations.


30

This model is adopted for listed subsidiaries, also in line with the management and coordination

activities of the parent company, giving them Guidelines and related polices for implementation.

With particular reference to financial reporting processes, the main characteristics of the Internal

Control and Risk Management System relative to such risks pursuant to Article 123-bis, paragraph 2,

letter b) of the TUF are described below.

Main characteristics of risk management and internal control systems in relation to the financial

reporting system process

1. Introduction

The risk management and internal control system in relation to the financial reporting process25,

developed within the Mediaset Group, aims to guarantee the dependability, accuracy, reliability and

timeliness of financial reporting.

Mediaset, in defining its own system, has aligned it with laws and regulations currently in force.

As reference standards do not explicitly establish specific criteria for the design, implementation,

evaluation and monitoring of the Risk Management and Internal Control System relative to financial

reporting, Mediaset has opted for the application of a model that is universally recognised as one of the

most accredited: the CoSO (Committee of Sponsoring Organizations) Framework. Furthermore,

implementation of the System takes into account the guidelines of some industry organisations

regarding the activities of the Appointed Director (the Italian Confederation of Industry, Confindustria,

and the National Association of Finance and Administration Managers, Andaf).

Article 154-bis of the TUF has established the position of Financial Reporting Office for issuers with

shares listed on regulated markets. This Officer is responsible, among others, in conjunction with

relevant functions, for developing adequate administrative and accounting procedures for the

production of financial statements, consolidated financial statements and interim reports, as well as all

other information disclosed to the market and relative to accounting disclosure and the issue of specific

certification.

2. Description of the main characteristics of the Internal Control and Risk Management System

in relation to the financial reporting system process

Roles and Functions involved

The Financial Reporting Officer is assisted by a specifically established company structure for the

purpose and by the Organisation Department: these structures support the Financial Reporting Officer

in designing, implementing and maintaining adequate administrative and accounting procedures to draft

the financial statements and the consolidated financial statements and supply the Financial Reporting

Officer with elements to evaluate their adequacy and effective functioning.

The structure assisting the Financial Reporting Officer works with process owners to promptly identify

events that may impact or change the reference framework, update administrative accounting

procedures, implement new controls and carry out any improvement plans within their own processes.

The Internal Audit Function periodically carries out independent checks on the adequacy and actual

functioning of the control model adopted by the Company to ensure compliance with the requirements

of the Law on the Protection of Savings in relation to obligations of the Financial Reporting Officer.

25

“Financial reporting” means, for example, periodic accounting information, annual and interim financial reports, interim reports on operations – also

with reference to consolidation – ongoing disclosure and press releases.


31

Stages of the Internal Control and Risk Management System in relation to the financial reporting

process

The risk management and internal control system, relative to the financial reporting process, basically

comprises a number of administrative accounting procedures and tools to evaluate the adequacy and

actual functioning of procedures, which contribute to establishing an internal control model that is

maintained, updated and, where concrete opportunities for rationalisation and optimisation are

identified, is further developed.

The model is structured in three main stages:

a) definition of the scope of analysis with the identification and evaluation of risks;

b) identification and documentation of controls;

c) evaluation of the adequacy and actual application of administrative and accounting procedures

and relative controls.

a) Definition of the scope of analysis, with the identification and evaluation of risks

To determine and plan activities to check the adequacy and actual application of the Group’s

administrative and accounting procedures, the definition of the scope of analysis describes the process

to adopt when determining the level of complexity, identifying and assessing risks and assessing the

materiality of financial statement areas. This process aims to assess controls of transactions generated

from company processes that supply accounting data and record them in financial reporting.

Significant processes that are representative of the business are identified based on the quantitative

analysis of financial statement items, applying the concept of materiality to aggregate items contained

in the Consolidated Financial Statements of the Mediaset Group, and on a qualitative analysis of

processes based on their level of complexity.

For each process identified as significant, the “generic” risks of the unreliability of financial reporting

inherent in the process itself are determined, referring to financial statement assertions (existence and

occurrence, completeness, rights and obligations valuation and recognition, presentation and

reporting), which constitute control objectives.

The Financial Reporting Officer defines the reference context, at least annually and whenever elements

occur that may considerably change the analysis carried out.

To complete scope analysis, a summary and overall analysis at a Group level is also carried out on the

internal control system at a functional and/or organisational level (entity level control). This analysis

breaks down each component of the CoSO framework in supervisory areas that, based on the Risk

Assessment carried out, should be covered by the Group and monitored by management.

For each of the identified supervisory areas, actual risk coverage connected with it is tested, checking

the existence of company procedures and practices adopted by the Group.

b) Identification and documentation of controls

Controls are defined by a process that identifies administrative and accounting procedures that meet

various control assertions 26.

26

Reference control assertions are the following:

accuracy: this control ensures that all details of the individual transaction have been correctly processed;

completeness: this control ensures that all transactions are processed and are only processed once;

validity: this control ensures that the processed transaction has passed adequate authorisation levels and is effectively referable to company operations;

restricted access: this control ensures that access to information and transactions is adequately configured according to the roles and responsibilities

recognised by the Company.


32

The controls identified and specifically applied when carrying out activities are formalised in a specific

matrix (the “Risk and Control Matrix”) and, in this matrix are related to the “generic” risks of the

unreliability of financial reporting.

Administrative and accounting procedures and relative controls are periodically monitored and updated

through a process that involves the Financial Reporting Officer, his/her support structure and process

owners. Specifically, process owners inform the Financial Reporting Officer, on a regular basis, of

events that may impact and change the frame of reference of significant procedures, and on an annual

basis, the support structure of the Financial Reporting Officer reviews and validates the entire control

model, involving all process owners in reviewing processes in their area of responsibility.

c) Evaluation of the adequacy and actual application of administrative and accounting procedures and

relative controls

The adequacy and actual application of administrative and accounting procedures is evaluated by

specific testing, and aims to guarantee the design and operational ability of identified controls.

The Group has adopted a testing strategy which basically consists of defining the approach and criteria

used for testing: the frequency of analysis, sizing of the sample, types of tests to carry out,

formalisation of tests carried out and information flows to notify test outcomes.

The purpose of testing is to guarantee the actual application of controls in compliance with the defined

testing strategy. On a six-monthly basis, the support structure of the Financial Reporting Officer

prepares a report indicating activities carried out and test outcomes.

Based on testing results, the Financial Reporting Officer, assisted by his/her support structure, defines a

plan to remedy any deficiencies that may have a negative impact on the effectiveness of the risk

management and internal control system relative to financial reporting.

The Financial Reporting Officer’s support structure, in conjunction with process owners, for areas in

their responsibility, coordinates improvement plans and guarantees their implementation.

On at least an annual basis, the Financial Reporting Officer reports to the Risk and Control Committee,

the Board of Statutory Auditors and the Supervisory Bodies of Group companies, with reference to

procedures used to evaluate the adequacy and actual application of controls and

administrative/accounting procedures, as well as compliance with remedial plans defined, and rates the

adequacy of the accounting and administrative control system.

11.1. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM DIRECTOR

At its meeting on 30 April 2015, the Board confirmed the appointment of the Chairman as Internal

Control and Risk Management System Director.

During 2016 and the first few months of 2017, the Internal Control and Risk Management System

Director:

- implemented the guidelines issued by the Board and verified their adequacy and effectiveness;

- supervised amendments to the system concerning the dynamics of operating conditions and the

legal and regulatory framework;

- oversaw the identification of the main company risks (strategic, operational, financial and

concerning compliance) taking into account the characteristics of the activities carried out by the

Company and its subsidiaries, and based on the guidelines for the Internal Control and Risk

Management System established by the Board of Directors.


33

The analysis and evaluation of main business processes and of the processes supporting the business,

with the involvement of the Group's management, Internal Audit department, and Risk Officer, made it

possible to give an overall evaluation of the Internal Control and Risk Management System (which was

finalised with the presentation of the Report by the Internal Control and Risk Management System

Officer to the Board of Directors during the meeting of 22 March 2016).

11.2. INTERNAL AUDIT FUNCTION MANAGER

The Issuer has established an Internal Audit Function to ensure that the internal control and risk

management system is both functioning and adequate.

The Board of Directors, following the proposal of the Risk and Control Committee and after consulting

with the Board of Statutory Auditors, confirmed Angelo Iacobbi as Internal Audit department manager,

defining his compensation as being consistent with company policies and ensuring he has adequate

resources to undertake his responsibilities. The Board found the incentive mechanisms for the Financial

Reporting Officer to be commensurate to the tasks assigned to him.

To ensure an adequate level of independence and objectivity in internal audit activities, the Internal

Audit Function Manager is not responsible for any operational area.

The Internal Auditing department reports to the Chairman, who informs the Board.

In compliance with international reference standards on auditing, the Internal Audit Function checks,

both on an ongoing basis and in relation to specific needs, the functioning and adequacy of the internal

control and risk management system, implementing an Audit Plan approved by the Board of Directors,

based on a structured process, analysing and prioritising the main company risks.

The scope of the activities performed by Internal Audit27 cover Mediaset and all direct and indirect

subsidiaries of the Group, excluding listed companies and their subsidiaries and investees. With

reference to investees of the Group and joint ventures, auditing activities by Internal Audit may be

performed on the basis of specific requests by the companies’ own boards of directors.

In 2016, the Internal Audit Department’s tasks covered:

assurance, which consists of an objective review of evidence and findings, through analyses,

evaluations, recommendations and qualified comments, in order to obtain an independent

evaluation of the internal control and risk management system;

advice, which consists of methodological support and assistance to provide added value and

improve governance, risk management and control processes.

In its activities carried out during 2016, the Internal Audit Function had free and direct access to data,

documents, information and personnel useful to carrying out its duties.

During the period, the Internal Audit department Manager prepared periodic reports28 containing

information on: activities carried out, including audits on the reliability of company information systems

and accounting systems; procedures used to manage risks; and compliance with plans to limit risks. The

reports also contained an evaluation of the suitability (adequacy and actual operation) of the internal

control and risk management system.

As regards the 2016 financial year, the Internal Audit department considered the internal control and

risk management system to be operational and adequate.

27

in compliance with the mandate assigned to it by the Board of Directors on 17 December 2013 28

sent to the Chairmen of the Board of Statutory Auditors, Risk and Control Committee and Board of Directors, as well as to the Internal Control and

Risk Management System Director of Mediaset S.p.A.


34

The Internal Audit Function Manager also maintained periodic communication flows with other company

bodies and structures that have supervisory and monitoring functions in relation to the internal control

and risk management system, such as the Financial Reporting Officer, the Risk Officer and Supervisory

and Control Bodies of the Mediaset Group, pursuant to Legislative Decree 231/2001. In compliance with

the recommendations of international standards for the profession, the Internal Audit Function

introduced measures designed to assure and improve the quality of its activities. In 2016, in compliance

with International Standards for the Professional Practice of Internal Auditing, a Quality Assurance

Review was conducted of internal auditing activities. The Internal Audit Department notified the need to

conduct a new external review to obtain certification for 2016, opting, as in 2011, for an approach

based on a self-review convalidated by a qualified and independent external assessor. The Review

findings are currently being prepared.

11.3. COMPLIANCE PROGRAMME PURSUANT TO LEGISLATIVE DECREE 231/2001

The internal control system was strengthened further by adopting an Compliance Programme pursuant

to Legislative Decree 231/2001, approved, in its first draft, at the Board of Directors meeting of 29

July 2003 and later repeatedly amended and supplemented to reach its current version, approved by

resolution of the Board of 20 December 2016.

With the adoption of its Compliance Programme, which includes general and operational rules, Mediaset

sought to establish a structured and organic system, including a set of general principles of conduct, as

well as procedures and activities that meet the control purposes and provisions of Legislative Decree

231/01, in terms of prevention of crimes and administrative offences (preventive controls), and in

terms of control of the programme’s implementation and any application of fines and sanctions (ex post

controls).

The Compliance Programme comprises principles, company rules, provisions and organisational

frameworks relative to the management and control of the Company’s activities and includes a summary

document, explaining the general regulations that are appropriate for preventing the commission of

offences indicated in Legislative Decree 231/01 and a number of attachments (including, among others,

the updated wording of Legislative Decree 231/01, a description of all criminal offences envisaged by

the decree, a summary of so-called "areas of activities at risk of offences being committed" concerning

the Company and relative organisational oversight).

The Compliance Programme that Mediaset adopted in 201629 refers, specifically, to the following types

of “predicate offence”: offences that may take place during relations with the Public Administration,

corporate crimes, market abuse, offences of organised crime, computer crime, negligent offences

infringing occupational health and safety laws, crimes against industry and trade, handling stolen goods,

money laundering and the use of any monies, goods or other utilities from illicit sources, self-laundering,

offences concerning copyright, the offence of omitting to make or making false statements to the

judicial authorities, environmental offences, offences in employing citizens from third-party countries

without valid permits, corruption among private entities.

The updates of the Compliance Programme took into account mostly (among other things): the

legislative changes that occurred from time to time; the ensuing broadening of the range of "predicate

offences;" internal organisational changes; and ongoing case law precedents being established

regarding Compliance Programmes.

29

An essential part of the Compliance Programme adopted by Mediaset are the “General Guidelines in Anti-Corruption matters”, adopted in 2014 in

order to align the Mediaset Group with the best practices developed at the international level to combat the phenomenon of corruption. The

document describes the general principles which (in compliance with provisions in the Code of Ethics and in order to prevent unlawful or improper

behaviour, including acts of corruption for any reason) shall inspire the conduct and actions of all persons who work for the Company or the Mediaset

Group, in particular in "areas of activities in which there is a risk that offences may be committed."


35

The Italian subsidiaries adopted similar initiatives to adapt and implement their respective Compliance

Programmes, taking into account their respective structures and specific company activities. The main

foreign subsidiaries have independently defined their company protocols and procedures in line with the

principles of Mediaset’s Compliance Programme, in accordance with the laws in effect in the countries

where they are established and in relation to their typical activities, as well as operating sectors.

On 18 December 2012, the Board of Directors of the Company approved current version of the Code of

Ethics of the Mediaset Group30 (the first draft was adopted in 2002 and subsequently amended in

2008), convinced that business ethics must be pursued as the key to the company’s success and that,

therefore, the Code of Ethics is a fundamental part of the Compliance Programme and of the Group’s

internal control system as a whole. In this regard, the principles and values in the Code of Ethics

represent the cornerstone on which the Compliance Programme is based, and are a useful means for

interpreting the actual application of the programme in relation to company dynamics.

The Supervisory and Control Body

The Supervisory and Control Body, confirmed by the Board of Directors on 30 April 2015, after

ensuring that it met the same requirements concerning reputation applicable to directors of the

Company and requirements concerning adequate professional competence, and also after ensuring the

absence of incompatibility and conflicts of interest with other company functions and/or positions that

would undermine its independence, freedom of action and judgement, will expire from office with the

approval of the Financial Statements to 31 December 2017. The Committee comprises three members:

Sergio Beretta Chairman - Consultant

Aldo Tani Consultant

Davide Attilio Rossetti Consultant

The composition of the Supervisory and Control Body was considered appropriate to satisfy the

requirement that this role and the ensuing responsibility must be assigned to persons that can wholly

guarantee the necessary autonomy and independence that such body must possess.

Mediaset has not given the Board of Statutory Auditors the functions of the Supervisory and Control

Body, as it considered it appropriate to have a Body with specific competencies regarding compliance,

pursuant to Legislative Decree 231/01, and which is wholly dedicated to this activity.

In carrying out its activities, the Supervisory and Control Body is supported mainly by the Internal Audit

department and - where necessary - it may be assisted by other company departments or outside

consultants.

The Supervisory and Control Body carries out the duties and has the powers established in the

Compliance Programme. To undertake its responsibilities, the Supervisory and Control Body may, at any

time whatsoever, at its own discretion and independently, verify the application of the Compliance

Programme and procedures relative to it, also regarding each member separately.

As a result of the audits conducted (on specific company operations and the procedures/rules of

conduct adopted), and in relation to legal and/or organisational developments, or to the identification of

new areas of activities at risk of serious infringements of provisions of the Compliance Programme,

and/or of company procedures that refer to it, the Supervisory and Control Body also informs the

Company of the advisability of making changes and updates to the Compliance Programme and/or

relative procedures. With subsequent follow-up activities, the Supervisory and Control Body ensures

30

The new text of the Code of Ethics was adopted by Mediaset S.p.A. and its subsidiaries.


36

that any corrective actions recommended to the Company have been adopted by relative company

functions.

During 2016, the Supervisory and Control Body met six times and reported, every six months, to the

Board of Directors, Risk and Control Committee, and Board of Statutory Auditors.

11.4. THE INDEPENDENT AUDITORS

The Shareholders' Meeting of 16 April 2008 appointed the independent auditors Reconta Ernst & Young

S.p.A. to audit the Financial Statements and Consolidated Financial Statements and to audit the Interim

Reports in a limited form for the 2008/2016 financial years, pursuant to provisions in Articles 156 and

159 of the TUF. The Financial Statements of subsidiaries are audited: by Reconta Ernst & Young S.p.A.

and, for EI Towers S.p.A., by Deloitte & Touche S.p.A.

11.5. THE FINANCIAL REPORTING OFFICER

The Board of Directors, during its meeting of 30 April 2015, upon favourable recommendation of the

Board of Statutory Auditors, confirmed Mr Luca Marconcini, manager of the Consolidated Accounts,

Accounting Principles and Risk Office department as Mediaset Financial Reporting Officer. All powers

and responsibilities needed to fulfil the assignment and related tasks were attributed to the Financial

Reporting Officer31.

For the year 2016, the Financial Reporting Officer, assisted by the Risk Office and Organisation

departments, implemented, in relation to main company processes within the operating companies of

the Group,32 the activities33 required to assess, adapt, and document the Internal Control System as

required by Law 262/05.

The 2016 Financial Statements and Consolidated Financial Statements of the Company include

statements issued based on the programme established according to CONSOB regulations on the

adequacy and actual application of procedures, as well as their consistency with accounts and adequacy

in giving a true and fair view of the equity, economic and financial standing of the Company and of

companies included in the scope of consolidation, signed by the Financial Reporting Office and Chairman

of the Company.

The Financial Reporting Officer, together with the Risk and Control Committee and independent

auditors, evaluates the correct use of accounting standards and, in the case of the Group, their

uniformity for the purpose of preparing the Consolidated Financial Statements, which is done during the

first few months of each financial year.

In its meeting of 22 March 2016, the Board of Directors (within the limits of the budget that it approved)

allocated funding of EUR 350,000 per annum to the Financial Reporting Officer for expenses related to

his duties.

The Board found the incentive mechanisms for the Financial Reporting Officer to be commensurate to

the tasks assigned to him.

31

pursuant to Article 154-bis of Legislative Decree No. 58 of 24 February 1998 and to Article 28 of the Bylaws. 32

With reference to listed subsidiaries, the Financial Reporting Officer of the Mediaset Group coordinates with the financial reporting officers of these

companies, in order to have appropriate evidence of the activities they perform to evaluate the adequacy of controls.

33

Specifically, the following activities were carried out:

the identification and evaluation of company processes and relative risks;

the updating of identified processes and controls;

the analysis of the adequacy of controls adopted relative to administrative/accounting and financial aspects;

testing and relative documentation of controls to check the actual application of administrative/accounting procedures;

formalisation of the remedial plan to eliminate any deficiencies identified during controls;

monitoring of the status of remedial activities and testing of relative controls implemented.


37

11.6. COORDINATION BETWEEN PARTIES INVOLVED IN THE INTERNAL CONTROL AND RISK

MANAGEMENT SYSTEM

The coordination between parties involved in the internal control and risk management system is

ensured by a steady flow of information between those parties. In addition, all the members of the

Board of Statutory Auditors are required to attend the meetings of the Risk and Control Committee; in

addition, at the request of the Risk and Control Committee, aided by the Manager of the Corporate

Affairs Department, the meetings can also be attended by the Internal Audit department, the Financial

Reporting Officer and the heads of specific company departments.

12. INTERESTS OF DIRECTORS AND RELATED-PARTY TRANSACTIONS

Procedure for related-party transactions

The Board meeting of 9 November 2010, with the favourable opinion of the Governance Committee,

approved the “Procedure for transactions with related parties”34 and established the Committee of

Independent Directors.

Later, in its meeting of 17 December 2013, taking into account of the favourable opinion of the

Committee of Independent Directors for Related-Party Transactions,the Board of Directors amended

article 7 letter a) of the Procedure, effective as of 1 January 2014.35

Committee of Independent Directors for Related-Party Transactions

The Committee of Independent Directors, appointed on 30 April 2015, consists of three independent

directors who will remain in office until the term of office of the entire Board expires.

Michele Perini Chairman - Independent Director

Carlo Secchi Independent Director

Alessandra Piccinino Independent Director


the Company's Affairs Department, appointed as Committee Secretary, attends the meetings. In the

days preceding meetings, sufficiently in advance of the meeting, the Secretary, as agreed with the



The Committee of Independent Directors met five times during 2016.


34

Implementing the provisions of the "Regulations on transactions with related parties," adopted by Consob with resolution No. 17221 of 12 March

2010, and later amended by resolution No.17389 of 23 June 2010, the procedure, which can be consulted on the website, sets forth the rules to

identify, approve, perform, and publish transactions with related parties conducted by Mediaset S.p.A., either directly or through subsidiaries, in order

to ensure the transparency and substantial and procedural correctness of said transactions, as well as the cases of exclusion from the implementation

of said rules. 35

The amendment concerned the introduction of the threshold for transactions of low value with counterparts that are natural persons. Specifically,

the Procedure identifies material and non-material transactions, establishing the rules for carrying them out and identifying transactions to which the

foregoing regulations do not apply. Excluded transactions include, in particular, non-material transactions (of a total value not above EUR 300,000.00 if

the counterpart is a natural person and not above EUR 500,000.00 if the counterpart is a corporate body), transactions with, or between, subsidiaries

and affiliated companies, and normal transactions.


38

As a rule, all members of the Board of Statutory Auditors take part in the meetings, and the managers



The Committee of Independent Directors carries out the duties established by the Regulations on

Related-Party Transactions and Procedure for Transactions with Related Parties. Specifically, as regards

non-material transactions, its opinions are non-binding; as regards material transactions, its opinions

are binding.

On 14 December 2016, the Committee adopted the decision not to amend in any way the Related Party

Transactions Procedure in force, having determining that there were no reforms to the legislative and

regulatory framework governing related party transactions requiring the amendment to the relative

procedure.

The Committee also carries out periodic analyses and checks based on reports prepared by the

Corporate Affairs Department, pursuant to Article 8.5 of the Related Party Transactions Procedure.

In its meeting of 30 March 2015, the Board of Directors (within the limits of the budget that it approved)

allocated funding of EUR 100,000 per annum to the Financial Reporting Officer for expenses related to

his duties.



Directors with interests

Before dealing with transactions, the Directors shall give exhaustive information to other Directors and

to the Board of Statutory Auditors of all interests, even potential, which they have in a specific

transaction of the Company, on their own behalf or that of third parties, independently of any situation

of conflict; they shall also specify the nature, terms, origin, and scale of said interests; if the Director

involved is the Chief Executive Officer, he shall also refrain from carrying out the transaction.

13. APPOINTMENT OF STATUTORY AUDITORS

The appointment of Statutory Auditors is regulated by Article 28 of the Company Bylaws given in

Attachment D to this Report.

The Shareholders' Meeting elects the Board of Statutory Auditors, consisting of three regular auditors

and three alternate auditors, who remain in office for three financial years until the date of the

Shareholders' Meeting convened to approve the Financial Statements of the third financial year. The

auditors may be re-elected.

All Statutory Auditors shall be included in the Register of Auditors established by the Ministry of Justice

and have carried out auditing for a minimum of three years. In addition, the Statutory Auditors must

satisfy the requirements of the laws and regulations in effect and the Board makes sure that said

requirements are satisfied.

Based on the Company Bylaws, lists may only be presented by shareholders who have voting rights and

who, either alone or together with other shareholders, hold the amount of share capital required by the

Company Bylaws to present lists for the appointment of members of the Board of Directors. Pursuant to

Consob resolution No. 18775/2014, the shareholding percentage required to present lists of candidates

for the Board of Statutory Auditors at the Shareholders' Meeting of 29 April 2014 amounted to 1%.


39

14. STATUTORY AUDITORS

The Board of Statutory Auditors, in accordance with laws and regulations in force, oversees: compliance

with law and Company Bylaws, compliance with the principles of fair and proper administration, the

adequacy of the Company’s organisational structure for areas under its responsibility, the internal

control system, the administrative/accounting system, as well as the reliability of the latter in correctly

representing operating data, the procedures to implement corporate governance regulations required

by governance codes prepared by companies managing regulated markets or trade associations, which

the Company, through disclosure to the public, declares it adopts, and the adequacy of provisions issued

by the Company to subsidiaries.

The current members of the Board of Statutory Auditors are:

Mauro Lonardo, Francesca Meneghel and Ezio Maria Simonelli as regular auditors, and Massimo Gatto,

Flavia Daunia Minutillo and Riccardo Perotta as alternate auditors, and will remain in office until the

Shareholders’ Meeting convened to approve the Financial Statements at 31 December 2016.

Attachment E to this report shows the composition of the Board of Statutory Auditors.

The Chairman of the Board of Statutory Auditors is Mauro Lonardo, who was first in the minority list.

Two lists were presented at the Shareholders' Meeting of 29 April 2014 (728,801,373 shares, or 61.6%

of the share capital )36.

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

List 1Fininvest S.p.A.

(41.29 % of share capital)

List 2Shareholders

( 0.96% of share capital)

Ezio Maria Simonelli

Francesca Meneghel

Francesco Vittadini

Riccardo Perotta

Flavia Daunia Minutillo

Fabrizio Malandra

Mauro Lonardo

Massimo Gatto



The curricula vitae of the members of the Board of Statutory Auditors may be consulted on the

Company’s website and are also shown in Attachment F to this report.

The composition of the Board of Statutory Auditors has not changed since the end of the reporting

period.

***

36

The first list was nominated by the shareholder Fininvest S.p.A. The second list was nominated by the following shareholders: ANIMA SGR S.P.A.

(Fund Manager: Fondo Anima Geo Italia, Fondo Anima Italia, Fondo Anima Star Italia Alto Potenziale, Fondo Anima Geo Europa, Fondo Anima Geo

Europa PMI and Fondo Anima Iniziativa Europa) APG ASSET MANAGEMENT N.V. (Fund Manager Stichting Depositary APG Developed Markets

Equity Pool) ARCA S.G.R. S.P.A. (Fund Manager: Arca Azioni Italia and Arca BB) ERSEL ASSET MANAGEMENT SGR S.P.A. (Fund Manager of

Fondersel P.M.I.) EURIZON CAPITAL S.A. (Fund Manager:

Eurizon EasyFund - Equity Italy and Eurizon EasyFund - Equity Italy LTE) EURIZON CAPITAL SGR S.P.A. (Fund Manager: Eurizon Azioni Italia)

GENERALI INVESTMENTS EUROPE SPA SGR (Manager of Assicurazioni Generali Group companies: Alleanza Assicurazioni S.p.A., Generali Italia

S.p.A., Genertellife S.p.A.) MEDIOLANUM GESTIONE FONDI SgrpA (Manager of the Mediolanum Flessibile Italia Fund) MEDIOLANUM

INTERNATIONAL FUNDS LTD (Manager of Challenge Funds) PIONEER ASSET MANAGEMENT S.A. (Manager of Pioneer Funds – Italian Equity)

PIONEER INVESTMENT MANAGEMENT SGRpA (Manager of the Pioneer Italia Azionario Crescita Fund)


40

During 2016, the Board of Statutory Auditors met 21 times. On average, each meeting lasted

approximately 2 hours. For 2017, 21 meetings have been scheduled, of which 4 have already been held.

On 20 December 2016, in accordance with the requirements of the Code, aimed at ensuring that the

statutory auditors satisfy the independence requirements, the Board of Statutory Auditors assessed,

among other things, whether its members satisfy said independence requirements and checked that the

assessment criteria and procedures adopted by the Board to determine the independence of directors

are correctly applied. The outcome of the check was reported to the Board on 20 December 2016.

Before meetings, Statutory Auditors are given documents on items to evaluate and resolutions to be

passed.

The Board of Statutory Auditors also monitored the independence of the independent auditors, verifying

compliance with relevant regulatory provisions regarding the nature and extent of the various services

supplied to Mediaset and its subsidiaries by the independent auditors and by entities belonging to their

network. The Board of Statutory Auditors had no objections to report.

Statutory Auditors who, on their own behalf or on that of third parties, have an interest in a specific

transaction of the Company shall promptly and exhaustively inform the other Statutory Auditors and the

Chairman of the Board of Directors as to the nature, terms, origin, and scale of their interest.

With regard to the requirements for the Statutory Auditors, it is reported that the Board of Statutory

Auditors currently in office satisfies all legal requirements.

When performing its activities, the Board of Statutory Auditors coordinated with the Internal Audit

department, Risk and Control Committee, Governance and Appointments Committee, and Independent

Directors Committee; it also participated in all Committee meetings, including those of the

Compensation Committee.

Information is exchanged regularly between the Board of Statutory Auditors and the Chairmen of the

Boards of Statutory Auditors of the subsidiaries.

The Chairman of the Board of Directors ensured that the Statutory Auditors, after their appointment

and during their term of office, were able to take part in initiatives designed to give them adequate

knowledge of the business sector in which the Group operates, of the company dynamics and their

development, as well as of the legal and regulatory framework37.

The Board of Statutory Auditors’ compensation, in accordance with Company Bylaws, is set by the

Shareholders’ Meeting. For details concerning compensation paid to members of the Board of Statutory

Auditors, see the Company’s Compensation Report, accessible on the website www.mediaset.it, section

Governance/Shareholders’ Meeting.

15. RELATIONS WITH SHAREHOLDERS

The Company’s website publishes financial information (financial statements, interim reports,

presentations to the financial community and the performance of Stock Exchange transactions involving

financial instruments issued by the Company) as well as data and documents that are of interest to

shareholders (press releases, composition of Company bodies and committees, Company Bylaws,

regulations and minutes of Shareholders' Meeting s, as well as documents and information on corporate

governance and the compliance programme pursuant to Legislative Decree no. 231/2001).

37

Can be consulted at chapter 4.2 Composition - “Induction Programme”.


41

In order to establish an ongoing relationship with the shareholders, based on an understanding of the

respective roles, the Board of Directors identified the Chief Financial Officer of the Group Marco

Giordani as the officer in charge of managing relations with the shareholders.

For this purpose the Chief Financial Officer is assisted by the following two functions that report directly

to him:

the Corporate Affairs Department,38 which oversees relations with Retail Investors and

Institutional Entities (CONSOB, Borsa Italiana);

the Investor Relations Department,38 which oversees relations with the Financial Community

(Financial Analysts, Institutional Investors and Rating Agencies).

In January, the financial calendar with details of main financial events, is reported to the market and

published on the Company’s website.

The contact details and telephone numbers of the Corporate Affairs Department and Investor Relations

Department are also published on the Company’s website.

16. SHAREHOLDERS’ MEETINGS

The Shareholders’ Meeting brings together the Company’s management and shareholders.

In convening, planning and managing Shareholders' Meetings, particular attention is paid to

encouraging Shareholder involvement, and to guaranteeing the highest standards of information given

during meetings, in compliance with restrictions and procedures for disseminating price-sensitive

information.

The Shareholders’ Meeting , when duly established, represents all shareholders and its resolutions,

passed in conformity to law, are binding on all shareholders, even if absent or in disagreement.

Shareholders’ Meetings are held in the cases and according to procedures established by law, at the

registered office of the Company or elsewhere, provided the venue is in Italy. As established by Article 9

of the Company Bylaws, the Shareholders’ Meeting is convened by a notice published according to law,

containing the date, time and venue, items to discuss, as well as any other information that is required

by laws in force. The notice and documentation concerning the items in the agenda must be published

on the Company's website within the terms required by the law, in accordance with the methods

established by the legislation in effect.

The Board of Directors promotes initiatives to encourage the utmost shareholder involvement in

meetings and facilitate the exercise of their rights, acting to limit restrictions and obligations that make

it difficult or expensive for them to take part in the Shareholders' Meeting and exercise their right to

vote regulated by Article 11 of the Company Bylaws.

Each shareholder who has the right to take part in the Shareholders’ Meeting may be represented by

written proxy, pursuant to law. In accordance with Article 135 - undecies of the T.U.F., designated the

company Computershare S.p.A., registered office in via Lorenzo Mascheroni 19, Milan, as the

representative for the 2016 Shareholders’ Meeting, tasked with collecting proxies from shareholders

and instructions on voting preferences for all or some of the agenda items. The Notice of Call of the

Shareholders’ Meeting will provide all the relevant details.

Generally, all directors take part in Shareholders’ Meetings. The Meetings are an opportunity to inform

shareholders about the Company, in compliance with regulations on inside information.

38

The contact details and telephone numbers of the Corporate Affairs Department and Investor Relations Department are also published on the

Company’s website.


42

The Shareholders’ Meeting is chaired by the Chairman of the Board of Directors, and, in his absence, by

the Deputy Chairman.

During the Shareholders' Meeting, the Board of Directors reports on activities carried out, referring to

Directors’ Reports, previously published in accordance with the law and regulations, and replying to

requests for clarifications from shareholders.

A file containing a copy of the draft financial statements and consolidated financial statements, and

relative reports, as well as the Directors’ report on proposals concerning items on the agenda is handed

out to those attending the meeting and sent to Shareholders who have taken part in previous meetings,

to ensure they are given adequate information on the elements necessary to make informed decisions.

The purpose of the voting system used at the Shareholders’ Meeting (remote control) is to facilitate

shareholders in exercising their rights and guarantee that voting results are immediately available.

The Shareholders’ Meeting has all powers established by law39. The Shareholders’ Meeting’s Regulations

govern the proceedings of the Shareholders’ Meeting .

Fifteen directors intervened at the Shareholders’ Meeting of 29 April 2016; the Chairman of the

Compensation Committee was among them.

No significant changed emerged over the year in the shareholding structure of the Company following

the purchase of ordinary Mediaset shares on the market by Vivendi S.A. (the percentage is reported in

table 1 “Information on Ownership Structure”).

17. CHANGES AFTER THE END OF THE REPORTING PERIOD

No changes to the corporate governance structure took place after the end of the 2016 reporting

period.

39

Pursuant to the Company Bylaws, assigning powers to the administrative body to resolve on matters that by law are assigned to the Extraordinary

Shareholders' Meeting (resolutions regarding mergers and demergers in cases provided for by Articles 2505, 2505-bis and 2506-ter of the Italian Civil

Code, the opening or closing of secondary sites, appointing directors to represent the Company, reducing share capital in the case of withdrawal of a

shareholder, making amendments to the Company Bylaws to take into account legal provisions), do not diminish the powers of the Shareholders'

Meeting to pass resolutions on such matters. As regards the establishment and resolutions of the Ordinary and Extraordinary Shareholders' Meetings,

on first and subsequent calls, relative legal provisions apply.


43

ATTACHMENT A

Company Bylaws

Board of Directors

Article 17)

1. The Company is administered by a Board of Directors, consisting of five to twenty-one Directors, who may be re-elected.

2. Before appointing the Board, the Shareholders' Meeting determines the number of members of the Board and their term of office, in compliance with the time limits established by law.

3. The Board of Directors is appointed by the Shareholders' Meeting based on lists, which may contain a maximum of twenty-one candidates, each numbered consecutively.

Each candidate may only be in one list. Failure to observe this provision will make the candidate ineligible for election.

Each shareholder may not present, or contribute to present, or vote for more than one list, even through an intermediary or trust company. Shareholders belonging to the same group – namely the parent company, subsidiaries and companies subject to joint control – and shareholders that take part in a shareholders’ agreement pursuant to Article 122 of Italian Legislative Decree 58/1998 relative to shares of the Company, may not present, or take part in presenting, or vote for more than one list, even through an intermediary or trust company.

Lists may only be presented by shareholders who have voting rights and who, either alone or together with other shareholders, represent at least 2.5% (two point five per cent) of the share capital comprising shares with voting rights in the Ordinary Shareholders' Meeting , or any different percentage established by pro tempore laws in force and which, from time to time, will be indicated in the notice convening the Shareholders' Meeting to resolve on the appointment of the Board of Directors. Ownership of the minimum amount of shares as above, required to present the lists, shall be calculated based on the shares that are registered in the shareholder's name on the day when the lists are filed at the Company. Certification proving ownership may also be presented after the list has been filed, provided this is within the deadline for the company to publish the lists.

In order to decide on directors to elect, lists that do not have a number of votes at least equal to half that required by the Company Bylaws or by pro tempore laws in force on the presentation of lists, will not be considered.

Each list shall include at least two candidates who meet the requirements for independence established by pro tempore laws in force, indicating them separately. Moreover, each list with at least three candidates shall indicate candidates of different gender, as indicated in the notice convening the meeting, in order to comply with pro tempore laws on gender balance.

The lists, which shall include the professional curricula of candidates, containing exhaustive information on the personal and professional profiles of the candidates and certifying their suitability as independent candidates pursuant to pro tempore laws in force, and signed by the shareholders that have presented the lists, shall be filed at the Company’s registered office within twenty-five days prior to the date of the Shareholders' Meeting on first or single call, subject to the terms established by law for filing notices convening meetings after the first call, and made available to the public, according to pro tempore laws in force.

Without prejudice to the possibility to produce certification proving the ownership of shares according to the terms in paragraph six herein, when presenting lists, information shall be given relative to the identity of shareholders submitting the list, indicating the percentage of their total shareholding. Shareholders other than those that hold, also jointly, a controlling or relative majority shareholding shall also present a statement certifying the absence of any relationships with the latter, as provided for by law. Within the same deadline, statements shall be filed by which individual candidates accept their candidature and declare, under their own responsibility, that no reasons exist preventing them from being elected or making them incompatible as established by law, and that they meet the requirements of law and regulations for members of the Board of Directors. Additional information required by pro tempore laws in force shall also be filed, along with each list, within the above deadlines, that will be indicated in the notice convening the Shareholders' Meeting .

Any lists presented without observing the above provisions shall be intended as not presented and not included in the voting.

4. At the end of voting, the votes obtained from the lists are divided by whole consecutive numbers from one to the number of directors to be elected.

The quotients obtained in this way are attributed to the candidates of each list, following the order in the list.


44

The quotients attributed to the candidates of the lists are then put in a single ranking in decreasing order. Candidates with the highest quotients are elected until the total number of directors established by the Shareholders' Meeting is reached. The foregoing is without prejudice to the candidate ranking first in the second list obtaining the highest number of votes and who is not related in any way, even indirectly, to shareholders that have presented or voted for the list that ranks first by number of votes being elected. Therefore, if the aforesaid candidate has not obtained the quotient necessary to be elected, the candidate who, in the first list, obtained the lowest quotient will not be elected and the candidate in first place on the second list obtaining the highest number of votes will be elected to the Board.

5. If, after following the procedure in paragraph 4 above, the number of directors, meeting requirements for independence, established by pro tempore laws in force, has not been appointed, the following procedure will be adopted.

If the Board consists of seven or fewer members, an independent director will be appointed - to replace the non-independent director who, in the first list, obtained the lowest quotient (or the second lowest if the candidate with the lowest quotient was replaced by the minority director pursuant to paragraph 4 above); this independent director will be the first independent candidate who is not elected, ranking second in the same list. If the Board consists of more than seven members and, after following the procedure in paragraph 4 above, only one independent director has been appointed, the second independent director will be appointed - to replace the non-independent candidate who, in the first list, obtained the lowest quotient (or the second lowest if the candidate with the lowest quotient was replaced by the minority director pursuant to paragraph 4 above); this independent director will be the first independent candidate who is not elected, ranking second in the same list.

If the Board consists of more than seven members and after the procedure in paragraph 4 above, no independent director has been appointed, independent directors will be appointed (i) to replace the candidate who, in the first list, obtained the lowest quotient (or the second lowest if the candidate with the lowest quotient is replaced by the minority director pursuant to paragraph 4 above); these directors will be the first independent candidates who are not elected ranking second in the same list and (ii) to replace the non-independent candidate elected with the lowest quotient in the second list with the highest number of votes; these directors will be the first independent candidates who are not elected ranking second in the same list; if all independent directors are from one list, the second independent director will also be appointed from this list according to the above criteria.

6. The candidate who is in first place in the list that obtained the highest number of votes shall be elected as Chairman of the Board of Directors.

7. If, in appointing Board members, several candidates have obtained the same quotient, the candidate from the list that has not yet elected any director or has elected the lower number of directors, will be elected.

If none of these lists have elected a director or have all elected the same number of directors, the candidate from these lists with the highest number of votes will be elected.

In the case of a tied vote between lists and with the same quotient, the Shareholders' Meeting will vote again in compliance with pro tempore laws in force, with the candidate obtaining the simple majority of votes being elected. 8. If, after voting, the Board does not comprise the minimum number of directors of the least represented gender established by pro tempore laws in force, the following procedure will be adopted:

a) to replace the candidate from the first list of the most represented gender with the lowest number of votes, that would have been elected pursuant to previous paragraphs (the last candidate), the candidate from the same list, of the least represented gender, with the highest number of votes, not elected pursuant to the above paragraphs, is elected;

b) if, based on the above procedure, the minimum number of directors of the least represented gender has not been reached, the replacement as of letter a) above, also applies to candidates of minority lists (provided they have at least three candidates), starting from the second list;

c) if the minimum number of directors of the least represented gender, established by law, has still not been reached, the penultimate candidate on the first list of the more represented gender will be replaced by the candidate of the least represented gender with the highest number of votes, who has still not been elected and, if necessary, this procedure will be adopted for minority lists until the minimum number of directors of the least represented gender, established by pro tempore laws in force, has been reached.

9. If only one list has been presented, the Shareholders' Meeting votes on the list and if the relative majority is obtained, candidates listed in consecutive order, up to the number established by the Shareholders' Meeting , are elected, without prejudice to compliance with requirements established by pro tempore laws in force and the Company Bylaws on the composition of the Board of Directors, and in


45

particular on gender balance. The candidate in first place on the list shall be elected as Chairman of the Board of Directors.

10. The voting procedure with lists is only applied in the case of renewal of the entire Board of Directors.

11. In the absence of lists, and when, based on voting by lists, the number of elected candidates is still lower than the number established by the Shareholders' Meeting , the Board of Directors is appointed by the Shareholders' Meeting with the majorities established by law, so as to ensure compliance with requirements established by pro tempore laws in force and by the Company Bylaws on the composition of the Board of Directors, and in particular, concerning gender balance. 12. If one or more directors no longer holds office, for any reason whatsoever, directors remaining in office shall replace them by co-option, ensuring, in any case, compliance with requirements established by pro tempore laws in force and by the Company Bylaws on the composition of the Board of Directors, and in particular, concerning gender balance.

Directors, appointed pursuant to Article 2386 of the Italian Civil Code, are elected by the Shareholders' Meeting with the majorities established by law, so as to ensure compliance with requirements established by pro tempore laws in force and by the Company Bylaws on the composition of the Board of Directors, and in particular, concerning gender balance; directors appointed in this manner remain in office up until the term of office of other directors expires.


46

ATTACHMENT B

Personal and professional profiles of Directors

FEDELE CONFALONIERI – Fedele Confalonieri was born in Milan on 6 August 1937. He graduated with a

degree in Law from Milan University. He is a member of the advisory boards of Confindustria and

Assolombarda. He is a director of the daily newspaper “Il Giornale”, of Veneranda Fabbrica del Duomo di

Milano, and a member of the General Board of Confindustria Radio Televisioni. He is also Director and

Deputy Chairman of the Board of Mediaset España Comunicación S.A.

PIER SILVIO BERLUSCONI – Pier Silvio Berlusconi was born in Milan on 28 April 1969. He began his

professional career in 1992 in the marketing department of Publitalia, moving on to the Italia 1

television network. In November 1996 he became Manager for the coordination of content and

programmes of Mediaset networks. In 1999 he was appointed Content Deputy General Manager of R.T.I.

He has been Deputy Chairman of the Mediaset Group since April of 2000, besides being Chairman and

Chief Executive Officer of R.T.I. In April of 2015 he was appointed Chief Executive Officer of Mediaset

S.p.A. He is also on the Board of Directors of the following companies: Medusa Film S.p.A., Arnoldo

Mondadori Editore S.p.A., Fininvest S.p.A. and Publitalia ’80 S.p.A.

GIULIANO ADREANI – Giuliano Adreani was born in Rome on 27 August 1942. He is a member of the

Board of Directors of Mediaset S.p.A. and Chairman of Publitalia’80 S.p.A., Digitalia ’08 S.r.l. and of

Mediamond S.p.A. He is also a Director of RTI S.p.A., Mediaset España Comunicación S.A., Medusa Film

S.p.A. and Auditel S.r.l. In 2003 he was awarded the title of Cavaliere del Lavoro by the President of the

Republic. In February 2009 he was awarded an Honorary Degree in Communication Sciences by the

University Suor Orsola Benincasa of Naples. Before joining the Mediaset Group in 1994, he worked for

Sipra, the advertising agent for Italian State Television, RAI, where from 1962 to 1994 he led all

commercial and creative sectors for newspapers, periodicals, radio and television, until his appointment

as Director General in 1991. In 2010 he ranked as the first Italian and fifth European in a classification of

CEOs of the best media groups produced by Thomson Reuters, the prestigious economic/financial

information company listed on the New York Stock Exchange.

MARINA BERLUSCONI – Marina Berlusconi was born in Milan on 10 August 1966. She joined the

company at a very young age and has always been deeply interested and involved in the management

and development of the Group’s economic and financial strategies. In July 1996, she was appointed

Deputy Chairman of Fininvest S.p.A., a position she held until October 2005, when she was appointed

Chairman of the holding company. Since February 2003 she has been the Chairman of Arnoldo

Mondadori Editore S.p.A. She is also a Director of Mondadori France SAS.

FRANCO BRUNI - Born in Milan on 12 April 1948. He is full professor of International monetary theory

and policy at Bocconi University; he has been a member of the Board of Trustees of the University and of

the Board of Directors of the pension fund for full professors and executives since 2015. At Bocconi

University, he directed the Political Economy Institute from 1994 to 2000. He is vice-president and

director of the scientific committee of ISPI (Istituto per gli Studi di Politica Internazionale di Milano

[Institute for Studies on International Politics of Milan]) and of the UniCredit&Universities Foundation.

Nominated in the list of institutional investors, he was member of the Board of Directors of Saipem SpA

(1998-2005) and of Pirelli&C (2005-2014); at Pirelli, he was member of the Risk Control and Corporate

Governance Committee and of the Strategies Committee. For many years he has been member of the


47

Management Board of NedCommunity, the association of independent directors. He is a member of the

BoD of Pioneer Investment Management SpA and of Mediaset S.p.A. He is the Italian member of the

European Shadow Financial Regulatory Committee. From 1994 to 2000 he was Deputy Chairman and

Chairman of Suerf, Société Universitaire Européenne de Recherches Financières [European University

Society of Research on Finance]. He has been visiting scholar and visiting professor at some

international universities, among which New York University, Getulio Vargas in Saõ Paulo, University of

British Columbia, University of South Wales, Fudan University in Shanghai. He is member of the scientific

board of Rivista di Politica Economica; for a number of years he was editor and then associate editor of

Giornale degli Economisti and of Annali di Economia; he writes columns for the newspaper La Stampa. He

authored many national and international publications on macroeconomics, monetary economics,

financial regulation, and European economy.

PASQUALE CANNATELLI – Pasquale Cannatelli was born in Sorianello (Vibo Valentia) on 8 September

1947. He was awarded a degree in Economics and Business from Cattolica University, Milan, and began

his professional career in 1972 at Rank Xerox. In 1985 he joined Farmitalia Carlo Erba as Group

Controller. He then worked for Alitalia, first as Administrative Director and then as Controller, and for

Farmitalia again, where he was Director of Finance Administration and Control of the Erbamont Group. In

July 1997 he became a Board Director of Mediaset S.p.A. and Central Director for Planning and Control.

In May 2003 he became Chief Executive Officer of Fininvest SpA., an office he held until June 2016,

when he was appointed Deputy Chairman of the holding. From October 2003 until 14 April 2017, he

was a director of AC Milan S.p.A. He is a director of Arnoldo Mondadori Editore S.p.A. and, Mediolanum

S.p.A.

BRUNO ERMOLLI – Bruno Ermolli was born in Varese on 6 March 1939. He has been an entrepreneur for

more than thirty years providing professional management and organisational advisory services. He

lectures on courses and seminars for entrepreneurs and managers. He is often called on to work with the

Prime Minister’s Office as an expert in Public Management and Public Administration Organisation. From

1985 to 1989 he was Promoter and Chairman of the National Federation for the Advanced Service

Industries Sector. From 1980 to 1982 he was Chairman of the National Association of Management and

Organisational Consultancy Companies. In 1970 he set up, and still chairs, Sin&rgetica, a leading Italian

Management Consultancy Company for: private businesses, banks, insurance companies, public entities

and the public administration sector. He has been nominated “Cavaliere del Lavoro” (award for

enterprise achievement) by the President of the Italian Republic. He is currently Chairman of Promos

(the Special Agency of the Milan Chamber of Commerce), a member of the Board and Committee of the

Chamber of Commerce of Milan, and Board Director of: Mediaset S.p.A., Fininvest S.p.A., Mondadori

France SAS, Bocconi University, Fondazione Milano per la Scala, FAI and Sipa Bindi S.p.A.

MARCO GIORDANI – Marco Giordani was born in Milan on 30 November 1961. He was awarded a degree

in Economics and Business from Bocconi University, Milan. Since 2000 he has been Chief Financial

Officer of the Mediaset Group. He is Chairman of Mediaset Premium S.p.A., Monradio S.r.l.

RadioMediaset S.p.A. and Virgin Radio Italy S.p.A. He is also Chief Executive Officer of R.T.I., director of

Mediaset S.p.A., Mediaset España Comunicación S.A., Publitalia ’80 S.p.A., and Medusa Film S.p.A. From

1998 to 2000 he was with IFIL S.p.A., Investments Control department; later he was appointed director

and member of the Executive Committee of LA RINASCENTE S.p.A., as well as director of S.I.B. (Società

Italiana Bricolage). In 1991 he became Finance Manager of the RINASCENTE Group and Chief Financial

Officer in 1997.


48

FERNANDO NAPOLITANO - Born in Naples on 15 September 1964. He holds degrees in Economics from

Federico II University in Naples and in Advanced Management from Harvard Business School in

Cambridge, Massachusetts, he completed his studies with a Master in Science Management from

Brooklyn Polytechnic University in New York. In 2011, he founded the “Italian Business & Investment

Initiative, Why Italy Matters to the World”.40 Since 2008, he has been Chairman of the Steering

Committee of the BEST (bestprogram.it) scholarship. He has been a director of the Board of Mediaset

S.p.A. since April 2015 and is a member of the International Advisory Board of the Bologna Business

School, Innogest sgr, Mind the Bridge, Stevens Institute of Technology, USA – Italy Council. In July 2016

he became a director of the Board of Albany Molecular Research Inc., a NASDAQ listed company on the

New York stock exchange (AMRI) based in Albany, New York State. After working for Laben S.p.A.

(Finmeccanica Group) and in the Marketing department of Procter & Gamble, he joined Booz Allen

Hamilton, where, from 1990 to 2010 he held the position of Partner and Senior Vice President, then,

starting in 2001, of Chief Executive Officer, and, from 2004 to 2008, of manager of the European

Advisory Board. He was member: from 2001 to 2010, of the Aspen Institute, from 2002 to 2014 of the

BdO of ENEL S.p.A., from 2002 to 2006 of the BdO of CIRA S.c.p.A. (Centro Italiano Ricerche

Aerospaziali [Italian Centre for Aviation and Space Research]), from 2004 to 2010 of the Council on

Foreign Relations in New York; from 2001 to 2005 he was appointed by the Minister of Communications

as member of the Ministerial commission for transitions from analogue television to ground digital

television. In 2014 he was one of the four recipients of the One to World Fulbright award in New York for

the results achieved by the BEST programme. He was captain of Canottieri Napoli during the 1986-1988

season and member of the Italian national water polo team; in 1984 he was European champion under

21.

GINA NIERI - Born in Lucca on 2 December 1953, she has two daughters. She earned a degree in

Political Sciences from Pisa University and specialised in journalism and mass communication at Luiss

University, Rome. She has been working in commercial television since 1977, firstly as General

Secretary of FIEL, the first association of “free” broadcasters. She then joined FRT – the Federation of

Radio and Television Operators – as Director remaining until 1990, when she joined the FININVEST

GROUP as Manager for Relations with Trade Associations. Currently at MEDIASET, she holds the position

of Director of Institutional and Legal Affairs and Strategic Analysis. Since June 2007 she has been

Deputy Chairman of R.T.I. S.p.A., and a board member since 1999. In April 2015 she was confirmed

member of the Board of Directors of Mediaset S.p.A., a position that she has held since 1998, and

member of the Executive Committee. She sits in the Board of Directors of Class CNBC S.p.A. From 2000

to 2005 she was member of the Board of Directors of ALBACOM S.p.A representing Mediaset. She is a

member of the General Council and the Presiding Council of CONFINDUSTRIA RADIO TELEVISIONI. She is

member of the President's Committee of the Master in Marketing, Digital Communication and Sales

Management di PUBLITALIA. She has participated and participates in work groups at the European

Commission, on matters concerning protection of minors, also on the internet, pluralism of the media,

and management of the radio spectrum. On 27 December 2012 she was awarded the title

"Commendatore dell’Ordine al Merito della Repubblica Italiana" (Commander of the Order of Merit of the

Italian Republic).

MICHELE PERINI - Born in Milan on 12 March 1952, holds a degree in Economics and Business from

Bocconi University. He is member of the Board of Directors of SAGSA S.r.l., a company operating in the

office furnishing sector; among the other positions that he holds is that of member of the Board of

Directors of Mediaset S.p.A. From 2003 to 2015 he was Chairman of Fiera Milano S.p.A. From 2001 to

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June 2005 he was Chairman of Assolombarda, where earlier (from 1997 to 2001) he was Chairman of

Small Business and where he is currently member of the Managing Council and of the Executive Board.

Until June 2010 he was a member of the Executive Committee and Board of Confindustria (the Italian

Confederation of Industry). He has sat on the Board of the financial daily "Il Sole 24 Ore" and of Bocconi

University. He is also committed to social issues and has been a member of the executive committee of

Telefono Azzurro, a child protection charity.

ALESSANDRA PICCININO - Born in Naples on 31 August 1962. She holds a degree in Economics and

Business from the University of Naples and completed her studies with a Master in advances European

studies (with specialisation in economic studies) at the College of Europe - Bruges. Between 1987 and

2010 she pursued a career in the finance area with The Dow Chemical Company, an American

multinational in the chemistry sector listed in the NYSE, holding several positions in the administration,

finance, and control area, in Italy and abroad. Among other positions, at Dow Chemical, she was Finance

Director for southern Europe and Finance Director of the Formulated Systems business unit, with

worldwide responsibility. From 2011 to 2013 she was CFO of Axitea S.p.A., a leading company in the

security area in Italy. Since 2012 she has been director, chairman of the finance committee, and

treasurer of the American School of Milan, an association recognised in the education sector. She has

been member of the Board of Directors and of the Appointments and Compensation Committee of

Ansaldo STS S.p.A., a company listed with Borsa Italiana [Italian stock exchange] in the STAR sector.

Since April 2015 she has been member of the Board of Directors of Mediaset SpA, a company listed in

the Borsa Italiana [Italian stock exchange] in the MTA sector; she was elected in the minority list,

presented by a group of companies in the management of savings and institutional investors area. In

Mediaset she is also member of the Committee of Independent Directors for Transactions with Related

Parties.

NICCOLO’ QUERCI - Niccolò Querci was born in Florence on 10 May 1961. He was awarded a degree in

Law from Siena University in 1986 and a Master’s in Business Communication in 1988. Since 2007 he

has been Central Manager, Personnel and Organisation in the Mediaset Group and Deputy Chairman of

Publitalia '80 S.p.A.; since late 2014, he has been Central Manager, Procurement. From 2006 to 2010

he was Chairman of Media Shopping S.p.A.. Since 2003 he has been Managing Director of R.T.I S.p.A. for

Human Resources, General Services and Safety. Since 2001 he has been Deputy Chairman of R.T.I.

S.p.A.; from 1999 to 2006 he was Director of artistic resources, productions, entertainment and sport

and, until 2008, he was Manager for diversified and new business activities of the Group. From 1992 to

1999 he was Assistant and Secretarial Officer of Silvio Berlusconi, holding various organisational

positions over the years. From 1989 to 1992 he was Key Account Manager and assistant Chairman and

Chief Executive Officer of Publitalia ’80, and Account Executive from 1987 to 1988 at P. T. Needham.

He is also director of Mediaset S.p.A..

STEFANO SALA - Born in Milan on 23 September 1962; he is married and has three children. He holds a

degree in business management from "Luigi Bocconi" University in Milan. He is a Director of Mediaset

(since April 2015), Chief Executive Officer of Publitalia ’80 (since April 2014), Chief Executive Officer of

Digitalia ’08 (since December 2012), Deputy Chairman of Mediamond (since February 2015) and

Director of RadioMediaset (since June 2016). From December 2012 to March 2014 he was Commercial

Managing Director of Publitalia '80. From January 2009 to November 2012 he held the office of

Chairman and Chief Executive Officer of GroupM Italy. From March 2006 to December 2008 he was

Chairman and Chief Executive Officer of Mediaedge:CIA Italy and Executive Vice president of GroupM

Italy. From January 2004 to February 2006, he was Chairman and Chief Executive Officer of Mindshare

Italy; earlier, from May 2001 to December 2003, he was Managing Director of Mindshare Italy. From

May 1999 to April 2001 he was Managing Director of CIA Italy; earlier, from April 1998 to April 1999,


50

he was Sales manager for CIA Italy. From April 1996 to March 1998 he was Sales manager with Cairo

Pubblicità. From March 1991 to March 1996, he worked with Telepiù Pubblicità as Sales Manager and

earlier as Sales Executive.

CARLO SECCHI - Born in Mandello del Lario (LC) on 4 February 1944. He is an Emeritus Professor of

European Political Economy at Bocconi University Milan, also acting as Rector from 2000 to 2004. He

was a Member of the European Parliament during the fourth legislature (1994-1999), where he was

Deputy Chairman of the Economic and Monetary Commission. He was a Senator of the Italian Republic

during the twelve legislature (1994-96). He is a member of governing bodies of technical/scientific

Foundations and Institutes. He is Deputy Chairman of ISPI (Institute for International Political Studies of

Milan. He is a member of the Board of Directors of the Veneranda Fabbrica del Duomo and of Mediaset

S.p.A.. Until 19 October 2016, he was a director of Italcementi S.p.A. In 2014 he was appointed

Chairman of the Supervisory Board of Pirelli S.p.A. Since 2009 he has been European Coordinator of

TEN - T priority projects (Atlantic Corridor). He is the author of books and numerous articles on

international commerce and economy, economic integration and European issues.

WANDA TERNAU - Born in Trieste on 24 September 1960. She holds a degree in engineering from the

University of Trieste, she was granted a Master of Business Administration from the Bocconi School of

Administration and later a Master of Laws, Construction Law and Arbitration from the Aberdeen

Business School, UK. She worked with ABB and the World Bank, on projects in the energy and

infrastructures sector in Russia, Kazakhstan, Jordan, Yemen, and Egypt. Currently, she is a director of

Ferrovie dello Stato Italiane SpA and Mercitalia Logistics SpA. Visiting professor at the Luiss Business

School and at Sapienza University in Rome, she is Fellow of the Chartered Institute of Arbitrators of

London and qualified international arbitrator at the Kuala Lumpur Regional Centre for Arbitration.

The companies Arnoldo Mondadori Editore S.p.A. and Mediolanum S.p.A. belong to the Fininvest Group,

of which Mediaset S.p.A. is part.


51

ATTACHMENT C

Office Members Year of birth

Date of first

appointment *

In office

sinceIn office until

List

**Exec.

Non

exec.

Indep.

per

Code

Indep.

per

TUF

Number

other

offices

***

(*)

(1)

(*)

(2)(**)

(*)

(3)(**)

(*)

(4)(**) (*) (**)

(*)

(5)(**)

Chairman Confalonieri Fedele 06/08/1937 16/12/1994 29/04/2015 31/12/2017 M X 9/9 8/9 P

Deputy Chairman

Chief Executive OfficerBerlusconi Pier Silvio 28/04/1969 28/07/1995 30/04/2015 31/12/2017 M X 2 9/9 5/9 M

Director Adreani Giuliano 27/08/1942 29/05/1996 29/04/2015 31/12/2017 M X 9/9 9/9 M

Director Berlusconi Marina 10/08/1966 28/07/1995 29/04/2015 31/12/2017 M X 2 8/9

Director Franco Bruni 12/04/1948 29/04/2015 29/04/2015 31/12/2017 m X X X1

8/9 8/8 M

Director Cannatelli Pasquale 08/09/1947 30/04/1997 29/04/2015 31/12/2017 M X 2 9/9

Director Crippa Mauro 26/04/1959 28/09/1998 29/04/2015 31/12/2017 M X 9/9

Director Ermolli Bruno 06/06/1939 22/02/2001 29/04/2015 31/12/2017 M X 3 8/9 6/6 M

Director Giordani Marco 30/11/1961 20/03/2001 29/04/2015 31/12/2017 M X 9/9 8/9 M

Director Fernando Napolitano 15/09/1964 29/04/2015 29/04/2015 31/12/2017 m X X X 9/9 7/8 M 6/6 M

Director Nieri Gina 02/12/1953 28/09/1998 29/04/2015 31/12/2017 M X 9/9 8/9 M

Director Perini Michele 12/03/1952 22/03/2011 29/04/2015 31/12/2017 M X X X 9/9 6/6 P 6/6

M

5/5 P

Director Alessandra Piccinino 31/08/1962 29/04/2015 29/04/2015 31/12/2017 m X X X 9/9 5/5 M

Director Querci Niccolò 10/05/1961 22/04/2009 29/04/2015 31/12/2017 M X 9/9

Director Stefano Sala 23/09/1962 29/04/2015 29/04/2015 31/12/2017 M X 9/9

Director Secchi Carlo 04/02/1944 20/04/2006 29/04/2015 31/12/2017 M X X X 9/9 8/8 P 6/6 P 5/5 M

Director Wanda Ternau 24/09/1960 29/04/2015 29/04/2015 31/12/2017 m X X X 2 9/9 6/6 M

NOTE

* The date of the first appointment of each director means the date when the director was appointed for the first time (in absolute terms) to the Board of Directors of the issuer.

(**) This column shows the qualification of the director on the Committee: "P": Chairman "M": member.

(***) Quorum required by the Company Bylaws. For the Shareholders' Meeting of 29 April 2015, called to deliberate on the appointment of the BoD, the required quorum is 1% (Consob resolution No. 19109/2015).

Committee of

Independent

Directors for

Related-Party

Transactions

Compensation

Committee

· This symbol indicates the internal control and risk management system director.

Number of meetings held during the reporting period: 9 Risk and Control Committee: 8

Indicate the quorum required for the presentation of lists by minorities for the appointment of one or more members (pursuant to Article 147-ter of the TUF): 1%(***)

TABLE 2: STRUCTURE OF THE BOARD OF DIRECTORS AND OF THE COMMITTEES

Risk and

Control

Committee

Board of Directors

Governance and

Appointments

Committee

Executive

Committee

Committee of Independent Directors for Related-

Party Transactions: 5

Governance and

Appointments Committee: 6

Executive

Committee: 9

** This column shows the list from where each director was taken ("M": majority list; "m": minority list; "BOD": list presented by the Board of Directors).

Compensation

Committee: 6

(*) This column shows the participation of directors in Board meetings and Committee meetings respectively (indicate the number of meetings attended compared to the total number of those which they could have attended);

*** This column shows the number of offices of director or statutory auditor held by the person concerned in other companies listed on regulated markets, also outside Italy, in the financial, banking, and insurance companies all companies of a significant size. In the Corporate Governance

Report, appointments are indicated in full.


52

ATTACHMENT D

Company Bylaws

Board of Statutory Auditors

Article 28)

1. The ordinary Shareholders' Meeting elects the Board of Statutory Auditors, consisting of three regular auditors and three alternate auditors, who remain in office for three financial years until the date of the Shareholders' Meeting convened to approve the Financial Statements of the third financial year. The auditors may be re-elected.

All Statutory Auditors shall be included in the register of auditors established pursuant to law and have carried out auditing for a minimum of three years.

Statutory Auditors shall meet requirements established by laws and by regulations in force, which shall be verified by the Board of Directors.

2. Statutory Auditors are appointed based on lists presented by shareholders, with the procedure established below. The lists shall indicate at least one candidate for the position of Regular Auditor and one candidate for the position of Alternate Auditor and may contain up to a maximum of three candidates for the position of Regular Auditor and a maximum of three candidates for the position of Alternate Auditor. The candidates are listed in consecutive order.

Each list consists of two sections. One is for candidates for the position of regular Auditor and the other for candidates for the position of alternate Auditor. Each candidate may only be in one list. Failure to observe this regulation will make the candidate ineligible.

Lists which, in the section for regular auditors, have at least three candidates shall include in the first two places of the same section, and in the first two places of the section of alternate auditors, candidates of a different gender.

3. Lists may only be presented by shareholders who have voting rights and who, either alone or together with other shareholders, represent the amount of share capital indicated in the Company Bylaws to present lists for the appointment of members of the Board of Directors. Each shareholder may not present, or take part in presenting, or vote, for more than one list, even through an intermediary or trust company. Shareholders belonging to the same group – namely the parent company, subsidiaries and companies subject to joint control – and shareholders that take part in a shareholders’ agreement pursuant to Article 122 of Legislative Decree 58/1998 relative to shares of the Company, may not present, or take part in presenting, or vote for, more than one list, even through an intermediary or trust company. Ownership of the minimum amount of shares required to present the lists, shall be calculated based on the shares that are registered in the shareholder's name on the day when the lists are filed at the Company.

The certification proving ownership may also be presented after the list has been filed, provided this is within the deadline for the company to publish the lists.

4. The lists, which shall include the professional curricula of candidates and be signed by the shareholders presenting them, shall be filed at the Company’s registered office within twenty-five days prior to the date of the Shareholders’ Meeting on first or single call, without prejudice to the terms established by law for filing notices convening meetings subsequent to meetings on first call, and made available to the public, according to pro tempore laws in force. Without prejudice to the possibility to produce certification proving the ownership of shares according to the terms in paragraph three herein, when presenting lists, (i) information shall be given relative to the identity of shareholders submitting the list, indicating the percentage of their total shareholding, (ii) curricula of all candidates shall be submitted containing exhaustive information on their personal and professional profiles and (iii) additional information, required by pro tempore laws in force shall be provided, indicated in the notice convening the Shareholders’ Meeting . Shareholders other than those that hold, also jointly, a controlling or relative majority shareholding shall also present a statement certifying the absence of any relationships with the latter, as provided for by law. Within the same deadline, statements shall be filed by which individual candidates accept their candidature and declare, under their own responsibility, that no reasons exist preventing them from being elected or making them incompatible as established by law, and comply with limits on the number of positions held as of the section above, and that they meet the requirements of laws, regulations and the Company Bylaws for members of the Board of Statutory Auditors, and the list of administration and control positions they hold in other companies.

5. Persons who hold a number of administration and control positions that exceeds limits established by pro tempore laws in force may not be elected as Statutory Auditors.

6. Lists presented without observing the above provisions shall be intended as not presented and not included in the voting.


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7. Statutory Auditors are elected as follows:

a) from the list that obtained the highest number of votes, two regular auditors and two alternate auditors are selected, based on the consecutive order in which they appear in sections of the list;

b) from the second list which obtained the highest number of votes in the Shareholders’ Meeting , of lists presented and voted by shareholders who are not related to reference shareholders, pursuant to Article 148, paragraph 2 of the T.U.F., the other regular auditor and other alternate auditor are selected, based on the consecutive order in which they appear in sections of the list.

If several lists have obtained the same number of votes, a ballot will be voted between these lists, in compliance with pro tempore laws in force, with the candidates from the list obtaining the simple majority of votes being elected.

8. The candidate in first place in the section of candidates for the position of regular auditor, elected pursuant to paragraph 7. b) above shall be appointed as Chairman of the Board of Statutory Auditors.

9. If only one list is presented, the Shareholders’ Meeting votes on it. If the list obtains the relative majority, the three candidates in consecutive order in the relative section will be elected as regular auditors, and the three candidates in consecutive order in the relative section will be elected as alternate auditors; the Board of Statutory Auditors is chaired by the person ranking first in the section of candidates to this position in the presented listed.

In the event of the death, resignation or end of the term of office of a regular auditor, the alternate auditor elected in first place will take over, provided this replacement ensures a gender balance. Otherwise, the auditor elected in second place will be appointed. If the Chairman steps down from office, the Board of Statutory Auditors chooses and appoints a new Chairman from its members, who shall remain in office until the first subsequent Shareholders’ Meeting, which shall make appointments to make up the numbers of the Board of Statutory Auditors.

10. Where no lists exist, the Board of Statutory Auditors and its Chairman are appointed by the Shareholders’ Meeting with relative majorities established by law and in compliance with pro tempore laws in force, also concerning gender balance.

11. If a number of lists are presented, and in the case of the death, resignation or end of the term of office of a regular auditor, the alternate auditor from the same list elected in first place will take over, provided this replacement ensures a gender balance. Otherwise, the auditor elected in second place will be appointed.

The following procedure is adopted by the Shareholders' Meeting to appoint auditors to make up the numbers of the Board of Statutory Auditors: if auditors elected from the majority list are to be replaced, the appointment takes place with a relative majority vote, without any list restrictions in compliance with pro tempore laws in force, also concerning gender balance; when, instead, auditors from the minority list have to be appointed, appointment is by relative majority vote, selecting candidates from the list in which the auditor to replace was included, or, subordinate to this, candidates of any other minority lists, in compliance with pro tempore laws in force, also concerning gender balance.

If there are no candidates from minority lists, the appointment takes place voting for one or more lists, comprising a number of candidates no greater than the number to be elected, presented before the date of the Shareholders’ Meeting , and in compliance with provisions in this article for appointing the Board of Statutory Auditors, without prejudice to the fact that lists by reference shareholders or shareholders related to them, as defined by laws and regulations in force, may not be presented (and if presented will be void). Candidates in the list with the highest number of votes will be elected.

12. The Shareholders’ Meeting determines the fees of auditors, in addition to expenses incurred for carrying out their duties.

13. The powers and the duties of the Statutory Auditors are established by law.


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ATTACHMENT E

Office Members Year of birth

Date of first

appointment *

In office

since

In office until

List

**

Independence per Civil

Code

Participation

in Board

meetings

***

Number of other appointments

****

ChairmanLonardo

Mauro

16/04/1969 20/04/2011 29 April 2014 31 December 2016 m X 21/21 14

Regular auditorFrancesca

Meneghel

02/12/1961 29/04/2014 29 April 2014 31 December 2016 M X 20/21 9

Regular auditorEzio Maria

Simonelli

12/02/1958 29/04/2014 29 April 2014 31 December 2016 M X 19/21 19

Alternate

auditor

Gatto

Massimo

27/06/1963 20/04/2011 29 April 2014 31 December 2016 m X 3

Alternate

auditor

Minutillo Flavia

Daunia

24/05/1971 20/04/2011 29 April 2014 31 December 2016 M X 11

Alternate

auditor

Riccardo

Perotta

21/04/1949 19/01/1996 29 April 2014 31 December 2016 M X 7

NOTE

** The date of the first appointment of each auditor means the date when the auditor was appointed for the first time (in absolute terms) to the Board of Statutory Auditors of the issuer.

*** This column shows the percentage of the participation of auditors in meetings of the Board of Statutory Auditors (indicate the number of meetings attended compared to the total number).

(*)At the Shareholders' Meeting held to appoint the Board of Statutory Auditors on 29 April 2014, the participation rate of 2.5% identified by Consob (resolution No.18775/2014) pursuant to art. 144-quater of the Issuers Regulation was 1%

Number of meetings held during the reporting year: 21

TABLE 3: STRUCTURE OF THE BOARD OF STATUTORY AUDITORS

Board of Statutory Auditors

Indicate the quorum required for the presentation of lists by minorities for the appointment of one or more members (pursuant to Article 148-ter of the TUF): 2.5%(*)

** This column shows the list from where each auditor was taken ("M": majority list; "m"; minority list).

**** This column shows the number of offices as director or statutory auditor held by the person concerned pursuant to article 148 bis of the TUF.


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ATTACHMENT F

PERSONAL AND PROFESSIONAL PROFILES OF THE BOARD OF STATUTORY AUDITORS

MAURO LONARDO – Mauro Lonardo was born in Rome on 16 April 1969. He holds a degree in

Economics and Business from Sapienza University, Rome. He has been a certified public accountant and

registered auditor since 1999. Performs professional activity as partner of Studio RSM - Lauri Lombardi

Lonardo Carlizzi. He is a member of several boards of statutory auditors and supervisory bodies

pursuant to Legislative Decree 231/2001, including Poste Italiane S.p.A., Ama S.p.A., Neep AS Roma

Holding S.p.A., Roma Multiservizi S.p.A., Intec Telecom Systems S.p.A., Rino Pratesi S.p.A., Rino

Immobiliare S.p.A., Ep Sistemi S.p.A., and Unicompany S.p.A. He has been Control and Analysis Manager

of the Group of the Municipality of Rome for local authority-run infrastructure and service companies. He

is the Chairman of the Board of Statutory Auditors of Mediaset S.p.A. and has been a lecturer for the

training institute of the College of Chartered Accountants of Rome.

EZIO MARIA SIMONELLI – Ezio Maria Simonelli was born in Macerata on 12 February 1958. He holds a

degree in Economics and Business from Perugia University. He has been a certified public accountant

since 1982, he is an auditor and freelance journalist. By appointment of the Ministry of Foreign Affairs

on 6 March 2013 he took up the position of Honorary Consul of Canada in Milan. He is Managing Partner

of Simonelli Associati, a Legal/Tax Advisory Practice. He is Chairman of the Board of Statutory Auditors

of Marr S.p.A., Alba Leasing S.p.A., and SISAL S.p.A., and regular auditor of Mediaset S.p.A., Cerved

Information Solutions S.p.A., and BPM S.p.A. He is an adjuster of the Lega Nazionale Professionisti.

FRANCESCA MENEGHEL - Francesca Meneghel was born in Treviso on 2 December 1961. She holds a

degree in Business Economics from Bocconi University Milan. She has been a certified public accountant

since 1993 and is a registered auditor. She practices the profession of chartered accountant and has

acquired experience in the industrial, commercial, banking, financial, and advertising sectors. She is an

independent director, Chair of the Risk, Control and Related Party Transactions Committee and Lead

Independent Director of Geox S.p.A.(listed). She chairs the Board of Statutory Auditors of Banca

Mediolanum S.p.A.(listed), A2A Calore & Servizi S.r.l., and Avon Cosmetics S.r.l. She is a regular auditor

of Mediaset S.p.A.(listed), Duemme SGR S.p.A., Esperia Servizi Fiduciari S.p.A., Immobiliare Idra S.p.A.,

Mediolanum Comunicazione S.p.A., Mediolanum Fiduciaria S.p.A., Mediolanum Gestione Fondi SGR

S.p.A., Press-Di Abbonamenti S.p.A., and Videodue S.r.l. She chairs the Supervisory Body of Banca

Mediolanum S.p.A.(listed) and is a member of the Supervisory Body of Mediolanum Gestione Fondi SGR

S.p.A.

MASSIMO GATTO – Massimo Gatto was born in Rome on 27 June 1963. He holds a degree in Economics

and Business from Sapienza University, Rome. He has been a certified public accountant since 1995 and

a registered auditor since 1999. He is official receiver for creditor arrangements at the Court of Rome.

He is a Property Officer and Court Expert registered with the Court of Rome. He is an Independent

Technical Expert for leading banks. He is Chairman of the Board of Statutory Auditors of SNAM S.p.A.,

regular auditor of FINTECNA S.p.A, of Collegamenti INTEGRATI VELOCI – C.I.V. S.p.A., Metro B1

S.c.a.r.l., RI.MA.TI S.c.a.r.l. and of the Associazione Nazionale per l’Enciclopedia della Banca e della

Borsa [National Association for the Encyclopaedia of Banks and Stock Exchanges]. He is also an alternate

auditor of Mediaset S.p.A., Unipol Gruppo Finanziario S.p.A., and Banca popolare di Vicenza S.p.A.

FLAVIA DAUNIA MINUTILLO – Flavia Daunia Minutillo was born in Milan on 24 May 1971. She holds a

degree in Economics and Business from Cattolica University, Milan. She has been a Certified Public

Accountant since 1996 and a registered auditor since 1999. Since 1998 she has been in the Boards of


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Statutory Auditors, Supervisory Boards, and Oversight Bodies of leading companies, including banks and

securitisation, factoring, trust, financial, brokerage, and asset management companies. She is also

alternate auditor of Mediaset S.p.A.

RICCARDO PEROTTA – Born on 21 April 1949. He was awarded a degree in Economics and Business

from Bocconi University, Milan. He is a certified public accountant and auditor. He is Associate Professor

of Methodologies and Quantitative Determinations for Businesses (Accounting and Financial Statements)

at Bocconi University, where he is responsible for teaching courses on Financial Statements and

extraordinary operations. He has been a certified public accountant in Milan since 1975, where he mainly

provides management, business and tax advisory services for companies, with a particular focus on

extraordinary financial operations. He is regular auditor of Boing S.p.A. and Savio Macchine Tessile

S.p.A., Chairman of the Board of Statutory Auditors of Cassa Lombarda S.p.A., Jeckerson S.p.A., Mittel

S.p.A., and MolMed S.p.A., and director of Value Partners Management Consulting S.p.A. He is also an

alternate auditor of Mediaset S.p.A.

For the Board of Directors

The Chairman

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